Turkey’s construction sector, the backbone of Ankara’s growth policies for the past decade and half, stands out among the earliest victims of the country’s economic crisis, rapidly contracting and threatening to drag others down with it.

The sector, including realty, accounted for 15.7% of Turkey’s $851.5 billion in gross domestic product (GDP) last year, almost on par with the manufacturing sector, which accounted for 18.5% of GDP. After impressive expansion, sales are now shrinking rapidly for homes and offices, leaving builders with swelling stocks. Housing demand, in particular, has fallen sharply, hit by the slump of the Turkish lira and the ensuing increase in interest rates. Building companies are struggling to decrease stocks and repay bank loans. Despite government incentives, including tax cuts and cheaper loan campaigns, the sector remains in turmoil, and the circle appears to be tightening.

In the first nine months of the year, home sales decreased 2.7% compared to the same period last year. Mortgaged home sales, meanwhile, were down 29.4%, largely the result of the increase in interest rates. The rate on home loans hit 25.2% in September, up from 12.9% in September 2017, before climbing further to 29% in October.

The overstock problem has also strained the government’s Housing Development Administration (TOKI) and its affiliated Emlak Konut, the country’s biggest real estate investment trust. Founded in 1984 to develop land with infrastructure and provide loan support to mass housing builders, TOKI turned to high-profit housing after the Justice and Development Party (AKP) came to power in 2002. Since 2008, it has also focused on the construction of public buildings, including hospitals and schools. As of June, TOKI had 142,000 homes for sale. Since 2003, it has sold about 696,000 of the nearly 838,000 homes it built, but it is now struggling to attract buyers, and the number of its new projects has visibly decreased.