mortgage interest rates forecast 2010
Predictions about the mortgage market (konut Kredisi Pazarı) in Turkey
Size of the Turkish Mortgage Market
The Turkish mortgage market has shown promising growth in recent years. While the existing mortgage loans only accounted for 0.6 percent of GDP in 2004 had, the stock jumped by 2.6 percent in 2005 and then to 4 percent in 2006. Is currently serving the existing mortgage of over 31 billion YTL, the roughly 5 percent of GDP.
These statistics clearly indicate that mortgage market was growing faster than the rest of the economy. As described below, we expect that it will probably be this Trend in the near future further. The rapid growth is driven primarily by economic factors such as falling interest rates and improving economic stability, but also by the characteristic factors for Turkey as massive population growth and strong ownership culture.
For 2008, we expect that The rapid growth in the mortgage market amid the continued decline in interest rates will continue. Under the assumption that inflation is moving towards the targeted 4 per cent and macroeconomic indicators in Turkey will not be weaker in 2008, we expect that interest rates will decline in 2008. Moreover, if the secondary mortgage market, the market begins to capital markets will start to reduce the risk of mortgages, shares and the cost of getting a mortgage loan is likely to continue . back
Based on these assumptions, we expect that the annualized growth in the mortgage market in the beginning of 2008, approximately 40 percent of median and then accelerate to about 50 percent of long-term interest rates fall by 1 percent in the second half of 2008. Based of these predictions, we find that by the end of the Be the year 2008, the mortgage loan of 47 billion YTL, or about 6.5 percent of GDP then.
They are still looking for more, based on the assumption of a continued decline interest rates, and recently announced plan of inflation falling to 4 percent, as planned in 2008, 2009 and 2010, our models predict that by the end of 2012, the mortgage loans can be as large as 15 to 18 percent of GDP.
Let us also that we believe that there are two major risks to our forecasts for 2008: The first is a turbulence in the global economy and financial markets, driven mainly by a worldwide recession in the U.S.. The second is a domestic financial crisis, probably caused by a current account imbalance. In any case, it would be very difficult to predict the growth of the mortgage market for the year 2008.
Forecasts on the structure of the Mortgage Market
We believe that in 2008, the Turkish mortgage market structure is to some important changes to start:
Increased 1) in refinance activity: Currently, the majority of new mortgage agreements, the issuance of new mortgages and refinancing of Mortgages did not take a large share of the market but we believe that the year 2008, which begins to refinance a substantial share of the market to take the middle of the Interest rates decline. If interest rates continue to decline, the share of refinancing activity is even more than half of total mortgage applications in a very short time.
2) variable-rate mortgages: Currently 99.9 percent of all mortgages are fixed-rate mortgages. This is not surprising, because floating-rate instruments are very new in Turkey and the risks and benefits of these new instruments are not yet understood. Moreover, the very large fluctuations in interest rates and exchange rates is In the early 2000s and accompanying bankruptcies are still fresh in the memory of the Turkish people and hopes that the crisis in culture. However, we believe that the benefits of variable rate mortgages will start to attract more people and their share in the year 2008 is slowly increased. But should the banks to reduce interest rates on variable rate mortgages that are not done so far is due to the lack of competition in this kind of products. We expect that competition will increase among mortgage bankers, we are at a lower variable Mortgage instruments begin soon.
3) credit: At present all mortgages offered by banks, but in 2008, consumer finance companies allowed to invest in the capital markets to raise funds for home loans to start offering mortgages. These new lenders start to the market structure Change, as they may be less structured and more flexible than the banks.
4) Secondary Mortgage Market: Secondary Mortgage Market The market is expected to starting in 2008. We expect that at the beginning, the secondary market, without a significant immediate change in interest rates will be experimental, but since the market matures, it is one of the main pillars of the mortgage market. It is difficult to predict the role of the secondary market now, but it is noteworthy that the secondary mortgage market the markets tend to play an important role in a few years after it started. For example, in the U.S. mortgage transactions in the secondary market began in 1970 and 1972, representing 4 percent of total mortgage debt, increased the share to 9 percent in 1979 and then to 16 percent in 1982. To see similar Growth in the Turkish secondary mortgage market, companies like Freddie Mac should be established, otherwise the growth is much slower.
The benefits of securitization have lower interest rates for the borrower, increasing the availability of credit, increasing liquidity for the lenders and increased efficiency in the mortgage markets.
If the mortgage markets merge with the capital in the form of securitized mortgages, the market will quickly impact on interest rates, mortgage rates.
In short, we expect that in 2008, the growth of the mortgage market will continue its pace and also going through major structural changes that even more growth in the lead coming years will continue.
About the Author
Berk Akman works at KrediHavuzu.com, leading online mortgage (konut, ev kredileri başvurusu) broker of Türkiye dedicated in providing interest rate, fee information and various advanced mortgage calculators (e.g., banka kredi masraflarını hesaplama ve karşılaştırma ).
