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Construction of İzmir


The construction sector which is seen as the locomotive of Turkey’s economy is a sector that provides contribution to employment because it is a sector that adds vitality and is a labour intensive sector.

The construction sector also mobilizes the other sectors that are inter-related. Along with the glass, cement, iron-steel, wood products, stones, bricks, energy, chemistry, plastics, machines, engine industries; services like banking, insurance and technical consultancy are also related with construction sector and are therefore affected by the developments of the sectors.

The construction sector has a relative importance in the economic growth.

In 2016 Turkish economy grew by 3,2% and the share of construction sector within the GDP has been 8,6%.

After the decrease in the 3rd quarter of 2016, the construction sector made up quickly and reached a relatively high growth rate of 18,7% at the 3rd quarter of 2017. Thus the contribution of the sector to the economic growth has been 8,7%.

Figure 1: Chained Volume Indexes and Change Rates Listed According to GDP and Economic Activity Branches (A10), 3rd Quarter: July - September, 2017

Source: Turkish Statistics Institute, Periodical GDP, 3rd Quarter: July - September, 2017, http://www.tuik.gov.tr

The construction sector which had a turnover increase of 10,8% in 2016 compared to the previous year; it is foreseen that it would pursue its turnover increase considering the growth performance of construction in 2017.

According to the Turkish Statistics Institute (TSI) data, the population of Turkey in 2016 is 79,8 million 92% of the population live in cities and districts’ centres. Population projection is 88,4 million for 2030 and 93,4 million for 2050.

Along with the rising population there is an intense immigration toward big cities. Therefore the real estate and residential demands are in continuous increase.

According to TSI data, the household number in our country is around 22 million. The average size of the household is 3,5 persons. The rate of house ownership which was 60,9% in 2006 has been 67,3% in 2015.

Based on this situation, due to the progressive increase of urbanization and the need of rehabilitation of the old residences; necessity of residential stocks arises. After the analysis of the building stock of Turkey, the necessity to renew at least 7 million of the existing 20 million buildings is identified.

After the “Law Regarding the Transformation of the Areas under the Risk of Disaster” entered into force in 2012, the increase of the urban renewal projects has contributed to the growth of the housing market. One of the high growth reasons registered in the construction sector in 2016 is the increase in the housing demands.

1.341.453 houses were sold in 2016 in Turkey. The house sales that increased 5,1% in 2017 compare to the previous year reached 1.409.314. The cities where maximum houses were wold in 2017 are respectively İstanbul, Ankara, İzmir, Antalya and Bursa.

In İzmir the number of house sales in 2017 increased 3,5% compared to the previous year and reached 84.141. When considered from districts perspectives, uttermost sales have been registered in Buca (10.208) and Karşıyaka (9.510).

The increasing projects recently in İzmir which is one of the most intense city in construction activities attracted the attention of the investors to İzmir. Along with the collective housing and social housing projects, the number of house and office construction of the biggest Turkish real estate companies increases each day in the area of İzmir which is declared as the new city centre.

The fact that İstanbul - İzmir highway would be completed in 2018 and the realisation of huge transportation projects such as the high speed train between İzmir and Ankara are important factors of the increase of the construction projects.

The İzmir Chamber of Commerce launched a comprehensive work about the areas subject to urban renewal before the Law 6306 relative to the transformation of the areas under the risk of disasters aroused and marked the areas that needed urban renewal on city’s map.

As a result of these studies; a total area of 1.223,67 hectares in İzmir has been declared as “Risky Area / Urban Renewal and Development Project Area”. Part of urban renewal projects is conducted by the Ministry of Environment and Urbanisation and part of them are conducted by the Municipality if İzmir.

Uzundere, Ege District, Örnekköy, Ballıkuyu, Bayraklı, Aktepe and Emrez District and Güzeltepe Urban Renewal Projects are projects that are conducted by the İzmir Municipality.

As a result, both collective housing projects oriented to middle and lower income groups and luxury housing estate projects oriented to higher income groups are keeping the constructions sector busy.

Gulf countries’ interest like Iraq, Saudi Arabia and Kuwait in the luxury housing projects in Turkey is going on.

Due to the insufficiency of lands directed to house building in our region and especially in İzmir, to the lack of infrastructure and because of the problems due to Procurement Law and Construction Law; investors frequently express that the sector cannot grow as necessary.

It is important to increase the public investments which constitute an important dynamic in the regression of public and private investments in the construction sector.

Urban renewal projects also bring along important opportunities in regard to the settlement of recycling and waste management practices. This allows new job opportunities and an increase in the employment rate.

It is important to educate the workers with the Professional Competence Certificate system as there is a lack of qualified, educated and certificated intermediate staff in the sector. Thus the competitive force would increase by providing the productivity and quality targets in the sector.

 

For more information:

Uzman Hande Uzunoğlu

Research, Entrepreneurship and Development of Professions Department
Tel: (232) 498 42 27, Faks: (232) 498 46 35

E-mail: hande.uzunoglu@izto.org.tr