One of the most important factors to consider when investing in real estate is economic indicators. Especially in Turkey WPI (Wholesale Price Index) and CPI (Consumer Price Index) is among the factors that directly affect price movements and rent increases in the real estate sector. Real Estate Sector we are discussing for you very decisive figures.
In this article, What is WPI CPI in Real Estate, how is it calculated, how does it affect housing and rental prices, how should investors follow these indicators? you will find comprehensive answers to questions such as.
What is WPI and CPI?
1. CPI (Consumer Price Index)
- CPI measures price changes in a basket of goods and services consumed by households.
- In other words, it tracks the price increases of expenditures such as food, transportation, education and health in daily life.
- In Turkey inflation rate is usually based on the CPI.
2. WPI (Wholesale Price Index)
- WPI measures price changes at the producer and wholesale level.
- That is, it reflects the costs before they reach the consumer.
- Especially the prices of materials used in the construction sector are shaped according to the WPI.
To summarize briefly:
- CPI → Shows the inflation reflected in the consumer's pocket.
- WPI → Shows producer costs and supply side.
The Importance of WPI and CPI in the Real Estate Sector
The real estate sector is seen as a safe haven for both investors and individual users in Turkey. However, this safe haven is not independent of economic indicators. WPI and CPI It is particularly important in the following respects:
- Rent Increase Rate:
- The annual increase in housing rents in Turkey has been based on the WPI and CPI averages for many years.
- Although different limits have been introduced for rent increase rates today, the system of the past is still on the agenda of investors.
- Housing Prices:
- When construction costs rise in line with the WPI, the price of newly built houses also rises.
- Since changes in consumer demand are measured by the CPI, purchasing power moves in parallel with this index.
- Loan Interests:
- The interest rate policy set by the Central Bank according to inflation directly affects housing loan costs.
- When CPI is high, interest rates also rise, which can reduce demand for housing.
- Investment Value:
- The WPI and CPI rates must be taken into account when calculating the long-term earnings of an investor when buying a house.
WPI CPI and Rent Increases
One of the most curious issues in the real estate sector is rent increasesIt is.
- In the past, the "WPI-CPI average" was used as the basis for rent increases.
- In other words, the average inflation rate of the last 12 months was taken into account when making the annual increase.
- In recent years, however, the state has been 25 percent limit He brought it.
Although this is a temporary arrangement, the importance of WPI-CPI in rent increases may come to the agenda again in the coming years.
Impact on Housing Prices
Factors that determine the price of a house include land value, location, demand construction costs also exists. This is where the WPI comes in.
- All items such as cement, iron, ceramics, glass, electrical installations producer price index (WPI) and therefore, the increase in these costs is directly reflected in house prices.
- The CPI determines the purchasing power of buyers. In other words, the consumer's pocket is affected by the CPI, while the contractor's cost is affected by the WPI.
Therefore, when WPI and CPI are analyzed together, they provide important clues about the direction of house prices.
How Should Real Estate Investors Use WPI-CPI?
When investing, it is important to consider not only location and housing characteristics, but also economic data. Here are some conclusions investors can draw from the WPI-CPI:
- WPI high → Construction costs will rise → New house prices will rise.
- CPI high → Consumer purchasing power will fall → Demand may slow down.
- Both high → House prices rise but sales slow down.
- Both low → Both costs and demand stabilize, the market revives.
WPI CPI Sample Scenario in Real Estate Sector
Let's say a new housing project is planned in Pendik:
- TEFE oranı %80 çıkmışsa → Demir, çimento gibi malzemelerin maliyeti yükselmiş demektir. Bu da dairelerin metrekare fiyatına doğrudan yansır.
- TÜFE oranı %60 ise → Hane halkının alım gücü sınırlı kalır. Konutlar daha pahalıya mâl olduğu için satışı yavaşlayabilir.
In this case, developers can offer their projects for sale in smaller square meters or with longer-term payment plans.
Where to Track WPI and CPI Data?
It is very important for investors and homeowners to regularly monitor WPI and CPI data. In Turkey, these data:
- TurkStat (Turkish Statistical Institute) is published every month.
- Official CPI and PPI reports are the main source for rent increase calculations.
- Real estate consultants and investors can make market predictions based on this data.
Frequently Asked Questions (FAQ)
1. What is the difference between WPI and CPI?
WPI represents producer costs and CPI represents consumer prices.
2. Is the WPI-CPI still valid for rent increases?
Şu an için kira artışları %25 ile sınırlıdır, ancak eski sistemde TEFE-TÜFE ortalaması kullanılırdı.
3. Do house prices necessarily increase when WPI-CPI rises?
Usually yes, because costs increase. But if demand falls, the price increase may be limited.
4. Is WPI-CPI tracking essential for real estate investment?
Yes, they do. Especially when investing for the long term, this data plays a critical role in predicting the future of the market.
5. How often is the WPI-PPI data released?
It is published by TurkStat every month.
WPI CPI in Real Estate is the Road Map of Investment
Although real estate is a safe investment instrument in every period, it cannot be considered independent from economic indicators. WPI and CPI ratesare critical parameters that directly affect both rent increases and house prices.
For an investor, following these rates regularly means catching opportunities in the market at the right time.
In short:
- WPI → Housing costs
- CPI → Purchasing power
reflects.
Investors who can read these two correctly will always be one step ahead in the real estate market.
