Housing prices in Turkey increased at a rate surpassed by only one other country in the world in the first quarter of 2015 compared to the same period a year ago, the Global House Price Index published recently by the real estate consultation firm Knight Frank has revealed.

Turkish housing prices rose by 18.6 percent year-on-year in Q1 of this year, the second highest behind Hong Kong, where prices increased by 18.7 percent in the same period, based on provisional data. While Ireland saw the greatest increase — 16.8 percent — after Turkey, fourth place belonged to Luxemburg, where prices surged in value by 12.1 percent. Ukraine came last, with housing prices in the country dropping by as much as 15.5 percent in the first quarter compared to Q1 of 2014. Cyprus and China followed Ukraine with declines of 8.2 percent and 6.4 percent, respectively. Turkey tops the list in Europe.

The index uses official governmental statistics or central bank data where available.

Despite the recent surge in prices, sector representatives often warn that further appreciation may occur amid unfavorable market conditions. Issuing a written statement on Monday, Mert Yıldızhan, a board member at construction firm Elit Yapı, said consumers may have to allocate a larger budget for housing expenditures due to a weakening Turkish lira against the US dollar.

Underscoring that some construction projects contain imported materials amounting to 60 or 70 percent of all their inputs, the depreciation in Turkish lira-US dollar parity — 20 percent since January — is likely to be reflected in prices as of the autumn months. “The rise in the price of construction materials will prompt sector representatives running out of stocks on hand to move to increase prices. There are several imported items in the sector including paint, plastic joints, elevators and iron,” Yıldızhan said.

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