Macro and Politics

* TURKSTAT will release October house sales figures @ 10:00 local time. Housing sales rose to 150,657 units in September, marking an annual increase of 6.9% and a 5.1% rise m/m. Moreover, mortgage-backed sales increased by 7.9% m/m and 34.4% y/y, reaching 21,266 units during the same month. Housing loan rates, which had hovered above 43% since June, declined to below 39%, with the average mortgage rate standing at 38.8% as of September. Although the decline in lending rates has remained relatively limited, we believe that the strong annual rise in mortgage sales has been primarily driven by expectations of future price appreciation amid housing prices that have been falling in real terms for some time but whose pace of depreciation has recently moderated. To recall, housing prices have been posting annual real declines uninterruptedly since February 2024; however, the magnitude of the loss has been narrowing, and the annual real change in prices is approaching neutral territory. We expect the annual change in housing prices to turn positive in real terms in the near term.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of October 31 – November 7 @ 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that during the week of October 31 – November 7, gross FX reserves increased slightly by USD943mn to USD184.6bn, while net international reserves increased by USD677mn to USD69.9bn. We anticipate that today’s official reserve data will likely reflect a similar rise in line with our estimates. To recall the previous week’s data: In the week of October 24–31, foreign investors were net buyers of USD242.8mn in the equity market, marking the first week of inflows following four consecutive weeks of outflows. Moreover, during the week of October 24 – 31, the residents’ FX deposits rose by USD130mn (excluding gold accounts and adjusted for the EUR/USD parity effect), while their total FX deposits (including gold, price adjusted) increased by USD800mn during the week of October 24 – 31. In terms of official reserves, the CBT’s gross FX reserves decreased by USD1.9bn to USD183.6bn, while net international reserves increased by USD1.5bn to USD69.2bn. Net reserves excluding swaps, moreover, edged up by USD0.6bn to USD52.5bn.