Introduction
Although the term “Sustainability” appears to be a recent concept, in fact it is an old world-view. Even though it does not have an explanatory and general definition, the widely accepted definition of sustainability defined by Brundtland Commission is as follows:
“Sustainability is to meet the needs of the present without compromising the ability of future generations to meet their own needs”.
Sustainable growth requires efficient use of available sources at a maximum extend. The purpose of sustainability includes meeting basic needs and realizing that environmental sources are not unlimited and therefore performing it within a plan.
The goals of sustainable development in Johannesburg Political Declaration on Sustainable Development signed in UN World Summit on Sustainable Development which was held inJohannesburg,RepublicofSouth Africain 2002 included change in patterns of consumption/production, wiping out poverty and conservation of natural resources. And the obstacles to those goals involved deepening cliff between the rich and the poor, degradation of biological diversity, negative impacts of globalization and decreased trust in democratic regimes.
A sector in which a sustainable growth is maintained will survive. The definition of sustainable development for the business world would be conservation and improvement of human and natural resources in an environment where the strategies necessitated by the business are adapted to professional life in a way to meet the needs of the company and its partners.
There are three principles to apply for a sector to ensure sustainable development. The first is to conserve environmental values and the environment, particularly the building sector tries to develop its all technology on renewable energy at the present time. It is because people demand buildings that can produce its own energy and damage the environment less during construction and use. Another factor supporting such demand is development and improvement of social life. The third factor is economical developments. In today’s world where even the smallest fluctuations can change the course of the markets by increasingly shrinking world market, the real estate market is developing in the light of economical developments and under the influence of inner dynamics.
According to the results of “2011 First Quarter Report of Turkish and the World Real Estate Sector” prepared to create a comprehensive database for real estate sector by the Association of Real Estate Investors (GYODER) that is accepted to be the leading organization of real estate sector in Turkey, in the first quarter Turkish economy has grown by 11 percent and, the building sector has become the second fastest growing sector with a growth of 14.8 percent. GYODER reports that the growth in building is considerably supplied with dynamism in commercial real estate and, the housing market is still inactive. The reason of inactiveness in housing market has been stated to be increased propensity in loan rate. One of the most significant reasons of dynamism in commercial real estate sector is shopping centers. The total number of shopping center has come up to 278 with 11 new shopping centers opened in the second quarter of 2011 and the size of total leasable area has reached up to 6.87 million m2.
The factors affecting real estate market inTurkeyinclude rapidly increasing population, immigration from rural regions to urban regions, natural disasters and increased need for office with increased number of multinational companies, increased need for building related to increased logistical services due to the geographical position ofTurkey.
The real estate market in Turkeycan be grouped as follows:
– Housing market
– Office market
– Logistics market
– Shopping centers
The real estate sector inTurkeymight experience different fluctuations depending on the economical crisis. For instance, the global economical crisis begun in 2008 had negative effects on real estate sector inTurkeyas on across the world. The developments in Turkish economy and its own inner dynamics have features in development of real estate market. According to 2015 report anticipated forTurkeyand real estate sector after global crisis, housing loan is anticipated to come up to 7,5 percent of gross national product in 2015 with 124 billion TL in based on the assumption of average annual economic growth of 4.5 percent between 2010 and 2015. This anticipation increase 17,4 billion TL in 2010 up to 36,9 billion TL in 2015 and 492 thousands housing loan of 75 thousands TL will be available in 2015. However, relative improvement in income distribution of household and the households outside the highest income group based on the assumption of economical growth will be able to use housing loan only if the interest is reduced down to monthly average 0,6 – 0,8. It is led to the conclusion that a decrease in monthly interests in future years can change inactiveness of housing market in 2011, on the other hand the inactiveness in housing market might continue or even depreciate.
1. Housing Market
The reasons of housing demand should be mentioned before summing up housing market in general. Housing demand can be divided in two, for housing or as a result of industrialization and urbanization. Housing is also an investment used in utilization of savings. Thus, housing demand and housing market directly is affected by many social events, the price of the house to income distribution in the country and inclination of consumption. Particularly the population growth rate in big cities, rapid urbanization and immigration, level of income, employment, investment opportunities and family structure are the factors affecting housing demand.Istanbul,AnkaraandIzmirare the main immigrant-receiving cities inTurkey. Thus, the housing demand in these big cities is increasing. One of the main reasons that increase the need for housing is that the income distribution in the country is inequitable. Dissolution of social state, increased private property and distribution of public ownership make the said distribution inequitable.
According to the Report on Istanbul Real Estate Markets drawn up considering 2008 market conditions, the real estate market inTurkeyhas an extremely high potential due to the need for renewing current earthquake-vulnerable buildings, rapid increase in dwelling number and increased investment demand of growing middle-income populations. Although global economical conditions have reduced general demand, mortgage housing finance that has become effective is one of big factors that increase housing demand. However, according to that reportIstanbul, one of the large cities, has a serious problem, uncontrolled urban growth. In this report uncontrolled urban growth is the most significant threat to sustainable growth in housing sector. From this assessment on, investment in urban transformation projects has a substantial effect on maintaining sustainable growth in housing market.
The housing problems should be solved for a healthy sustainable growth in housing sector. As we have mentioned above, these problems are rapid and unplanned urbanization, land and urban rent, poverty, remission of zone and empty or extremely crowded housings.
Analysis of Housing Sector
Figure 1: The graphic of number of housing sold in years
Considering the graphic of Number of Housing Sales throughoutTurkey, there is a decrease of 6000 between the last quarter of 2010 and the first quarter of 2011 but that decrease is inconsistent with the decrease in previous years. There are continually ups and downs in housing sales in four quarters of 2010.
2. Office Market
InTurkey, the office market is dense inIstanbul,AnkaraandIzmir. The office market inIstanbulis close to the international standards. The offices are classified A, B and C, this classification is done by the office prices and locations. The office market started to develop in 2002 with the increased number of multinational companies, foreign investments and large national companies. 75 percent of total office area inIstanbulis on European side.
According to the 2009 Report on Emerging Trends in Real Estate Markets in Europe, the investors abroad lean towards office areas in terms of investment in real estate inIstanbul. It is indicated in the same report that there are big opportunities in the other countries however people cannot benefit from such opportunities because the legislation has not been completed yet. Lack of storage in type A offices inIstanbulwas mentioned also in the Report on Real Estate Markets inIstanbul. From this reports on, we should pay attention to the improvement of type A offices and legislative arrangement of the offices inAnatoliaand other large cities in order to enable activeness in office market in future years.
3. Logistics Market
The fastest growing markets inTurkeyinclude logistics market.Turkeyis located at the junction point where the roads of Asia, Europe, Middle East and Northern Africa cross and this raises the importance ofTurkey. Approximately 60% of logistics activity inTurkeyis carried out inIstanbul. The performance of logistics market highly depends on economical conditions.
Turkey’s largest logistics market includes there cities,Istanbul, Izmit and Tekirdağ. The demand to storage facilities is increasing compared to the developments in retail sector in logistics market. The increased demand results in sharp raise in land prices and rent of quality storages and the square meter prices of small lands close to the city center rises up to 450 € and the highest rental rates go up to 5-6 €. The Anatolian side that hosts nearly all of the logistics area inIstanbulcomes to the forefront as the main logistics market. The investors such as EMG, Goodman and Logiturc continue to make investments in this market which they regard as a significant logistic center in a long term, considering the strategic position of the city, high population and potential due to the intense retail market.
4. Shopping Center Market
Shopping center market is spread throughoutTurkey. Although the shopping centers are generally centered in large cities likeIstanbul,AnkaraandIzmir, the construction of shopping centers is becoming widespread in also other cities. 58 percent of shopping centers opened in 2010 is centered inAnkaraandIstanbul. The number of provinces with a shopping center will be over 50 with 25 shopping centers opening in 2011. It is estimated that the number of shopping centers which is 266 now will be 291 at the end of 2011 and 323 at the end of 2012.
According to the report on 2010 Real Estate Market Developments inTurkeyand 2011 Anticipations, sustainable growth in shopping centers will be improved with transfer of foreign funds to the shopping centers. Although it is on the agenda that the shopping centers opening successively damage each other economically, on the other hand the shopping centers inTurkeyhave become focus of interest for foreign capital becauseTurkeyhas no Retail Laws.
5. Measurement of Sustainable Development
There are many different comments on measurement of sustainable development rate. It is observed that the function of conventional indicators such as Gross Domestic Product on sustainability has been decreased with the improvement of sustainable development concept. Indicators of sustainable development serve as a kind of performance assessment tool in the light of environmental, social and economical factors. We should pay attention to the problems that might arise during assessment of the results and selection of the indicators. Many international organizations and establishments continue the works to produce and improve the set of their own sustainable development indicators. For instance, United Nations CSD Indicators, European Common Indicators and Barometer of Sustainability.
If we should mention the indicators in building and housing sector, we have general indicators of real estate sector such as building permits for new housings, construction expenses, current property sales, new building sales rather than housing prices. Considering these indicators, we see that there was a decrease particularly in 2006 namely before the crisis.
6. The Factors Affecting Sustainable Growth in Real Estate Sector
According to the report on Analysis of Building Sector drawn up by Association of Turkish Contractors after the first quarter of 2011, it was expected that the housing prices would reduce in the last 3 quarters of 2011 and the growth would fall behind 2010. It is indicated in the same report that the measures taken against warming economy would give growth in housing sector pause. The building sector grew by 14,8% in the first quarter of 2011 and it is estimated that approximately a growth of 8,5% would be observed considering it would fall behind the growth of 8,9% in 2010.
6.1. The Factors that Have Positive Effects on Sustainable Growth in Real Estate Sector
The factors that have positive effects on sustainable growth in housing sector inTurkeyin future years are as follows:
– The rates of migration to large cities which is the vital point of housing sector increases housing demand and results in growth in housing sector as a result. When examiningIstanbulas a model city, according to data of Turkish Statistical Institution, the net migration rate was 2,1% between 2007-2008, 3,6% between 2008-2009 and 7,77% between 2009-2010. It can be stated by these figures thatIstanbulallows immigrants each year with an increasing graphic and thus the need for the housing will be increased.
– Increase in national income is a positive improvement for building sector as for each sector. According to estimations of national income of Turkish Statistical Institution for the months January – March in 2011, Turkey has gained speed with a high rate (of 11%) compared to the first three months of previous year (2010). One of the statistics that might be positive for the future of Building Sector is that the country has shown growth in national income.
– The need of society for housing and choosing to make investment in housing also contribute to sustainable growth in housing sector.
– Now people have started to require quality houses with the concept “perfect house” produced by urban transformation projects. Therefore we can suppose that urban transformation projects have also an impact on real estate sector.
6.2. The Factors that Have Negative Effects on Sustainable Growth in Real Estate Sector
The factors that have negative effects on sustainable growth in housing sector inTurkeyin future years are as follows:
– The situation of construction materials in financial market directly increases prices of houses and results in decreases in housing demand indirectly. According to data of Turkish Statistical Institute in 2011, inthe second half of 2011 Building Construction Cost Index was increased by 4,35% compared to the previous period, by 12,76% compared to the same period of previous year and by 8,70% compared to the mean of four periods. One of the reasons is the increase in the prices of iron. The price of a tone of iron was 1000 TL in July, 2010 and put up on the market at 1510-1595 TL on 14th July, 2011 and this is the reason why prices of the houses are increased. An increase in the price of a construction material that might occur in future years may further raise housing cost and damage sustainable growth.
– According to Istanbul Chamber of Real Estate Brokers and Consultants, a decrease of fifty percent in house sales was observed as of July, 2011 due to the increased loan interests. The hosing demand is reduced with the increase in loan interests because the increased loan interests will damage the buyer in the future years. It is estimated that the interests will not be reduced and even increased a little in the future periods.
Figure 2: Monthly Interest Rate for Housing Loan (Central Bank ofTurkey)
– The fluctuations in the stock market created by foreign-domestic financial crisis raise building costs. There might be an increase in the prices considering the crisis in contiguous countries and warnings by presidents about potential crisis. Thus, a sustainable growth in housing market is possible only in a dull financial market. We could mention that the growth in hosing market might be damaged considering the presence of a future crisis which is worried to emerge.
7. Sub-factors Affecting Sustainability in Real Estate Sector
Each city has specific sub-factors apart from main factors arising from economical, social and environmental causes mentioned above. The sub-factors can vary from the state of water, electricity and natural gas infrastructures of the cities to their geographical position, from growth power of the companies in that city to the competition in between. According to “Sustainability Survey of Cities in Turkey”, the most effective factor affecting general sustainability in Istanbul included geographical position, use of new technologies and being attractive for investors.
CONCLUSION
Sustainable Development prevents excess use of natural resources in the world and focuses on improvement, enhancement of life quality of world citizens and providing services to improve economy. This study is based on changing our conducts and policies with an entrepreneurial approach starting from life of individuals and up to international platforms. Sustainable Development has an influence on the corporate behavior manner and identity of a company thus on the value and the position of the company in national and international markets. As stated by Mustafa Kemal Ataturk,
“The thing needed by an individual to be content and pleased throughout their life is to work not for themselves but for the next generations.”
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