Macro and Politics

*TURKSTAT will release December house sales figures @ 10:00 local time. Housing sales declined by 14.1% m/m and 7.8% y/y in November, falling to 141,100 units, indicating that the recovery observed in recent months lost momentum as of November. While cumulative housing sales over the Jan – Nov period increased by 13.3% y/y to 1,434,133 units, the latest data point to a weakening trend on the demand side toward the final quarter of the year. Moreover, mortgage-backed sales totaled 21,499 units in November, declining by 8.6% m/m and 1.4% y/y and this marked the first annual contraction in mortgage-backed sales since August 2024. The limited easing in housing loan rates continues to weigh on demand, with average mortgage rates edging down only marginally from 37.9% in October to 37.8% in November. Notably, despite mortgage rates standing at 41.2% in November last year, the pace of annual growth in mortgage-backed sales had already slowed to around 10% in October before turning negative in November. Looking at sub-components, first-hand home sales declined by 5.4% y/y to 46,589 units in November, while second-hand sales fell by 8.9% y/y to 94,511 units. Housing sales to foreigners also weakened, decreasing by 9.7% y/y to 1,943 units. Taken together, headline figures, developments in mortgage rates and seasonally adjusted indicators suggest that housing demand has entered a noticeable weakening phase toward the end of the year.

* The Residential Property Price Index (RPPI) increased by 0.2% m/m and 29% y/y in December, reaching 204.5, while house prices recorded a 1.4% annual decline in real terms. As a reminder, the RPPI had posted a 0.2% y/y real increase in November, marking the first return to positive real territory since January 2024. As of December, however, the annual real rate of change has once again turned negative, pointing to the sharpest real contraction observed over the past six months. We expect real house price growth to remain subdued in the near term, reflecting the weakening momentum in housing demand during the final quarter of 2025.

*The short-term external debt stock decreased by 1.3% m/m in November, materializing at USD163.7bn. In terms of short-term debt statistics, we believe that “debt stock on a remaining maturity basis,” calculated based on the external debt maturing within 1 year or less regarding the original maturity, is rather critical, which is at USD224bn as of November 2025. Of this total, USD25.6bn is attributed to loans taken by resident banks and private sector affiliates from their branches and affiliates abroad. Stripping this amount from the total results in USD198.4bn. We also add 12-month forward-looking CAD expectations on this amount so as to reach Turkey’s annual external financing need (EFN).  Accordingly, we calculate EFN as of November 2025 around USD230bn.