Turkey Residential Real Estate Market Analysis 2025

Driven primarily by domestic buyers amid cooling foreign demand, sales in the Turkish housing market demonstrate strong momentum, while nominal price growth continues to lag behind persistently high inflation, resulting in real-term price declines.

This extended overview from Global Property Guide covers key aspects of the Turkish housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Housing Market Snapshot
• Historic Perspective
• Demand Highlights
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

Nominal house price growth in Turkey continues to lag behind inflation, resulting in real-term losses, though the pace of decline shows signs of easing. According to the Central Bank of the Republic of Turkey (CBRT), the Residential Property Price Index (RPPI) rose by 32.82% year-on-year in July 2025, corresponding to a 0.52% decline after adjusting for inflation.

Among the three largest cities, Ankara posted the strongest growth at 42.91%, making it the only major market to record positive real growth (7.03% year-on-year). In Istanbul, the index increased by 33.54%, remaining broadly flat in real terms, while Izmir registered a 30.99% rise, equivalent to a 1.90% real-term drop.

Turkey's house price annual change:

Note: National House Price Index: All Residential Dwellings (2023 = 100)
Data Source: Central Bank of the Republic of Türkiye.

Nationwide, the average unit price stood at TRY 39,697 (USD 1,025) per square meter in Q2 2025, up 22.40% year-on-year. Among the major cities, Istanbul recorded the highest price level at TRY 63,125 (USD 1,630), while Ankara saw the fastest annual growth at 33.58%. Muğla also stood out with values well above the national average, supported by limited land supply, strict zoning restrictions, and sustained demand from affluent domestic and foreign buyers seeking high-end coastal properties.

Average housing unit price, selected submarkets:

Market expectations point to further nominal price increases through 2025, though prospects for real-term growth remain uncertain and dependent on the inflation outlook. The Housing Sector Expectations Survey, conducted in the first half of 2025 by the Housing Developers and Investors Association (KONUTDER) in collaboration with NielsenIQ, showed that 76.2% of respondents expected housing prices to continue rising, while 23.8% anticipated stability.

Experts see potential for a stronger market recovery if monetary policy eases. Real estate specialist Rıdvan Akgün earlier projected that housing prices could rise by up to 50% in the second half of 2025, should borrowing costs decline, stimulating demand. Similarly, Abdulaziz Al-Kashif, Chairman of the Board of Omran Trk Company, highlighted the potential for a broader sector uptick, noting, "If interest rates reach 25%, market activity will resume. We expect this could be possible by 2026."

Historic Perspective:

Rapid Urbanization, Lira Depreciation, and Inflation Hedge Role of Housing

From the mid-2000s through 2017, Turkey's housing market underwent a prolonged expansion driven by rapid urbanization, large-scale construction activity, and strong domestic demand. During this period, nominal prices rose across most major cities, new supply increased sharply as developers responded to growing demand for apartment living, and transaction volumes expanded as credit conditions and household income supported home purchases.

Beginning in 2018, the housing market was reshaped by macroeconomic volatility: a sharp depreciation of the lira and an associated economic slowdown in 2018, followed by subsequent large exchange-rate moves and a period of very high consumer inflation, produced wide nominal house-price swings; at the same time, inflation-adjusted (real) house-price gains were actually recorded as negative.

From 2020 to 2022, property increasingly functioned as an inflation hedge for many investors, supporting robust demand for housing. Coupled with supply-side cost pressures, this led to particularly large nominal gains in property prices that were, however, uneven across regions and materially reduced once adjusted for inflation.

The February 2023 earthquakes introduced a major market shock. Emergency reconstruction programs, large public housing initiatives, and rebuilding activity accelerated construction in affected provinces and reshaped local demand and pricing dynamics. These developments amplified regional divergence: affected provinces saw intense rebuilding-related demand while other urban centers experienced differing post-shock trajectories.

Transaction volumes were volatile through 2023-24: overall annual house sales fell in 2023 relative to 2022, mortgage-financed sales contracted during episodes of tight credit and high rates, and pockets of recovery emerged in 2024 when windows of cheaper mortgage finance and episodic policy easing temporarily encouraged buyers. Foreign purchases were important for particular segments (coastal and large-city markets), peaking in 2022 and then declining sharply in 2023-24 as higher and more complex thresholds for investment-linked residency/citizenship dampened demand.

Data Sources: CBRT, TURSKTAT, Global Property Guide.

Demand Highlights:

Domestic Buyers Drive Growth Amid Cooling Foreign Investment

Residential property sales in Turkey continue to demonstrate strong momentum. According to the Turkish Statistical Institute (TURKSTAT), a total of 834,751 homes were sold nationwide between January and July 2025, reflecting a robust 24.19% increase compared to the same period last year. Second-hand properties accounted for 70% of all transactions, rising by 27.31% year-on-year, while first-hand sales represented the remaining 30%, growing at a more moderate pace of 17.51%.

Mortgage-financed purchases showed particularly strong growth, nearly doubling with a 93.15% year-on-year increase. This surge highlights a renewed shift from renting to homeownership, despite persistently high interest rates. Engin Keçeli, President of the Association of Real Estate Developers (İNDER), commented: "Rent increases are pushing people into homeownership, while price growth remains below inflation, keeping homes relatively affordable. Long-suppressed demand has now turned into necessity; there are no excuses left not to buy."

Data Source: TURKSTAT.

In contrast, foreign demand continued its downward trend. A total of 11,267 homes were sold to international buyers in the first seven months of 2025, marking a 12.05% decline from the previous year. The share of foreign transactions also fell, accounting for just 1.3% of total sales in July 2025, compared to 1.6% in 2024 and 4.5% at the market peak in 2022. By nationality, Russian buyers led with a 17% share, followed by Iranians (9%), Ukrainians (7%), and buyers from Germany and Iraq (6% each).

Bayram Tekçe, Chairman of the Real Estate International Promotion Association (GİGDER), attributed the ongoing decline in international sales to "rising property prices, slower and more complex residence and citizenship procedures, stronger competition from other countries, limited international promotion, and the absence of investor-friendly visa programs." He noted, however, that "while a sharp rebound is not expected, demand could gradually recover in the second half of 2025 as economic conditions improve and overall housing sales rise."

Data Source: TURKSTAT.

Regionally, Istanbul accounted for the largest share of transactions, representing 17% of national sales and recording year-on-year growth of 24.56%. Collectively, the four main markets (Istanbul, Ankara, Izmir, and Antalya) accounted for 37% of total transactions, recording a year-on-year growth rate of 26.31%. Among international buyers, Istanbul, Antalya, and Mersin remained the most sought-after destinations.

Residential sales, selected regions:

Looking ahead, experts remain optimistic, projecting that housing sales will continue to rise through 2025 and into 2026. KONUTDER President Ziya Yılmaz expects total sales in 2025 to surpass 1.5 million units, up from 1.48 million in 2024, pointing to renewed activity in first-hand and mortgage transactions, which have long trailed historical averages. Real estate expert Özden Çimen offers an even more optimistic forecast of 1.6 million units this year. Echoing this outlook, real estate entrepreneur Hakan Bucak noted, "Housing sales have been rising for 13 straight months, proving investor confidence. If demand continues, 2025 could be a record year. But production must be supported to solve supply shortages, while credit access and high rates remain a challenge."

Supply Highlights:

Rising Permit Activity Points to Recovery in Housing Pipeline

Residential construction in Turkey is regaining momentum, with new building permits signaling a strong recovery in future supply. According to the latest TURKSTAT data, 460,994 residential units received construction permits in the first half of 2025, representing a 28.01% year-on-year increase and marking the highest six-month total since 2017. The majority of permitted units (95%) were part of multi-dwelling developments, which recorded an annual growth rate of 29.38%. By contrast, single-unit homes accounted for just 5% of permits, with more modest growth of 7.5% year-on-year.

"Given that annual demand is estimated at around 800,000 homes, this surge suggests that the supply pipeline is beginning to align more closely with long-term structural needs," noted industry experts.

Note: Data covers only one-dwelling and multi-dwelling residential buildings.
Data Source: TURKSTAT.

The renewed momentum in permit issuance has yet to be reflected in completions. The TURKSTAT reported 278,596 dwellings receiving occupancy permits in the first half of 2025, a figure virtually unchanged from the same period in 2024. Within this total, multi-dwelling developments registered a 1.29% year-on-year increase, while single-unit homes declined sharply, falling 22.23% year-on-year.

Despite these advances, affordability remains the sector's most pressing challenge. Elevated construction costs and financing expenses continue to constrain households, contributing to declining homeownership rates. Industry leaders emphasize that growth in supply alone will not be sufficient unless accompanied by targeted measures to expand access. This has heightened focus on public-private partnerships and the utilization of publicly owned land to accelerate the delivery of affordable housing.

In response, policymakers are preparing a landmark social housing initiative. The government plans to launch the largest program of its kind in the Republic's history in the final quarter of 2025, targeting 500,000 units across all 81 provinces. Complementary rental housing schemes are also under development to support households unable to enter homeownership even under subsidized conditions. Together, these initiatives are expected to expand access, ease affordability pressures, and reinforce the ongoing recovery in residential supply.

Rental Market:

Rental Inflation High But Decelerating

As underlying factors such as general inflation, macroeconomic imbalances, increased foreign demand, and the impact of the earthquake in 2023 gradually stabilize, rental inflation in Turkey continues to decelerate, although it still significantly outpaces the overall growth of consumer prices, incentivizing many current tenants to seek homeownership options.

Turkey's rent price index:

Data Source: OECD.

In August 2025, the TURKSTAT reported a 74.3% year-on-year increase in the actual rentals for the housing component of the Consumer Price Index (CPI), a notable drop from 100.6% inflation registered in January and 121.3% observed a year earlier in August 2024. The all-item CPI during the same period recorded an annual increase of 33.0%, down from 42.1% in January and 52.0% in August 2024.

Commenting on the situation in July 2025, Treasury and Finance Minister Mehmet Şimşek outlined the Turkish government's plans to support the further easing of prices in the rental market through an increase in housing supply, primarily in metro areas, which have experienced a population influx. "We will have significantly increased the housing supply for those who came to metropolitan cities due to the earthquake," he said. "Currently, there are 550,000 housing units in the earthquake zone; nearly half of that has been delivered, and the remainder is fully tendered and under construction <…> We met with the Minister of Environment, Urbanization, and Climate Change this week. His plan is to build at least 500,000 social housing units over the next two to three years. This will be primarily in metropolitan areas."

Data Source: TURKSTAT.

A decelerating trend is also observed for average asking rents monitored by the Bahcesehir University Center for Economic and Social Research (BETAM) together with the listing platform sahibinden.com. According to their latest report, the average advertised price of rental housing nationwide reached TRY 238.8 (USD 5.9) per sqm in July 2025, demonstrating a 31.8% annual increase.

The dynamics varied across provinces and metropolitan cities. The provinces with the highest average asking price increases were Samsun (42.5%), Mardin (41.2%), Istanbul (39.3%), Şanlıurfa (37.9%), and Van (37.6%). The province with the lowest rent increase was Gaziantep (8.6%). The BATAM analysis notes that the annual increase in advertised rents in Konya, Hatay, Eskişehir, Malatya, and Gaziantep was lower than the CPI inflation rate over the same period, bringing the real (inflation-adjusted) growth into negative territory and making "buying and renting out a home for rental income no longer an attractive investment option" in these provinces.

Average asking rents dynamic in key submarkets:

The research conducted by Global Property Guide in August 2025 found gross rental yields for residential units in Turkey at the average level of 7.76%, up from 7.41% previously reported in February 2025 and 7.14% in June 2024. The highest potential performance among the surveyed submarkets was estimated for rental properties in Adana (8.87%), followed by Ankara (8.67%) and Istanbul (8.15%), while the lowest yields were recorded in Antalya (6.28%).

Mortgage Market:

Interest Rates Elevated, Lending Activity Limited Despite Recent Pick-Up

Turkey's mortgage loan interest rates:

Data Source: Central Bank of the Republic of Turkey.

The CBRT continues to implement a tight monetary policy anchored by the country's medium-term disinflation strategy. The regulator is trying to balance improved inflation trends and renewed price pressures, partly driven by stronger-than-expected GDP growth in Q2 2025. As a result, it remains cautious with cuts to its policy rate. At the end of July 2025, the CBRT lowered the 1-Week Repo Rate from 46% to 43%. The next cut, expected at the September meeting, will likely be more moderate (200 bps), considering the latest macroeconomic developments.

Data Source: CBRT.

Mirroring the policy rate trajectory, average interest rates on new housing loans in Turkey eased somewhat in the last few months, dropping from 43.5% in June 2025 to 40.4% in August 2025. Nonetheless, the indicator remains substantially elevated compared to pre-2023 levels, consistently pushing upward the average interest rate on outstanding housing loans, which reached 28.9% in July 2025, up from 21.0% a year prior and 16.3% two years ago.

Weighted average interest rates on housing loans:

Against the elevated interest rates background, the annual volume of mortgaged housing sales in Turkey, a general indicator of lending activity, has been in decline since 2021, dropping to a decade low of 158.5 thousand in 2024. In the first seven months of 2025, however, the trend appears to have reversed, with the TURKSTAT reporting 121.5 thousand mortgaged sales, which represents a 93.2% increase against the same period last year.

Despite this recent pickup, lending activity is still subdued, with the share of mortgaged sales in total housing transactions in the period between January and July 2025 reaching just 14.5%, which is above the annual ratio of 10.7% reported in 2024, but substantially below the 30.6%, on average, observed in 2015-2020.

Data Source: TURKSTAT.

The nominal size of the housing credit market in Turkey continues to expand rapidly; however, with the total value of outstanding housing loans demonstrating an average annual growth rate of 21.2% in the last five years. As of July 2025, the combined loan stock of the country's banking sector stood at TRY 594.0 billion (USD 14.8 billion), of which 89.9% was maintained by deposit money banks, and the remaining 10.1% split between participation banks and investment and development banks.

At the same time, the ratio of housing loans to GDP in Turkey is still significantly lower than in other countries with well-developed mortgage systems and has been on a downward trajectory in recent years, dropping from an estimated 6.2% in 2016 to 5.5% in 2020 and just 1.2% of GDP at current prices in 2024.

Data Sources: CBRT, OECD.

Socio-Economic Context:

Growth Slows, Gradual Disinflation Ongoing

Turkey's economic activity is now moderating after periods of strong growth driven by expansionary fiscal and monetary policies, which stimulated domestic demand but created large imbalances, including surging inflation, a widening current account deficit, and a large depreciation of the national currency. Following the May 2023 elections, more restrictive setting of monetary and fiscal policies delivered significant improvements to the framework, supporting the economy's gradual return to a sustainable path.

The country's real GDP growth slowed from 11.4% in 2021 to 3.2% in 2024 and is projected by the World Bank to remain broadly stable this year at 3.1%, underpinned by the maintained tight monetary stance, anticipated fiscal tightening, and subdued global growth, before accelerating to 3.6% in 2026 and 4.2% in 2027. Anticipating a similar trajectory, the July 2025 update of the World Economic Outlook from the International Monetary Fund (IMF) expects Turkey's GDP to reach 3.0% in 2025 and 3.3% in 2026.

At the same time, against the backdrop of lingering economic imbalances and external vulnerabilities, Turkey's national currency continues to weaken, with the average exchange rate reaching TRY 40.2 per USD 1 and TRY 47.0 per EUR 1 in July 2025, a surge of 22.2% and 31.6%, respectively, over the last year.

While easing from the extraordinary peak of 72.3% in 2022 to 58.50% in 2024, Consumer Price Index (CPI) inflation also remains persistent, most recently reported by the TURKSTAT at 33.0% in August 2025. The World Bank anticipates deceleration to the upper 20s by the end of this year, projecting an annual inflation of 35.7% in 2025, 22.1% in 2026, and 14.8% in 2027, which is largely in line with the latest IMF forecast.

Data Source: IMF.

The Turkish labor market remains relatively strong despite slowing growth, with July 2025 unemployment reported by the TURKSTAT at 8.0%. At the same time, the broader measure of labor underutilization (consisting of time-related underemployment, potential labor force, and unemployment) remains high at 29.6% during the same period.

As noted in the 2025 economic survey from the Organization for Economic Co-operation and Development (OECD), lifting labor force participation will be essential for Turkey's future development. While the country's economy has benefited from a young and dynamic population over the past decades, this "demographic dividend" is set to gradually decline, slowing future potential growth.

Data Source: TURKSTAT.

The challenging macroeconomic landscape in Turkey is accompanied by lasting political turmoil, as the continued confrontation between the government and the opposition Republican People's Party (CHP) has led to rallies, street protests, and clashes with police.

The Turkish authorities, nonetheless, remain confident in the ongoing stabilization, Treasury and Finance Minister Mehmet Simsek recently telling Reuters that the disinflation process is continuing in a determined manner and the government would not allow it to be derailed. In early September 2025, the government published the updated medium-term economic program (MTP) for 2026-2028, which aims to bring inflation down to single digits by 2027 and re-accelerate growth to 5% by 2028. This target inflation forecast, however, marks a retreat from last year's version of the MTP, which predicted single-digit consumer price inflation a year sooner, by 2026.

Overall, risks to Turkey's economic outlook are tilted to the downside with significant uncertainty to the forecasts, notes the analysis from the World Bank. Domestically, private consumption remains robust, potentially delaying the adjustment process, while slow progress on structural reforms could further stall disinflation. Enhanced global economic uncertainty also poses negative risks to the country's growth prospects.

In July 2025, Fitch Ratings affirmed Turkey's 'BB-' standing with a stable outlook, citing a combination of fundamental strengths and weaknesses that impact the rating. A record of high inflation and political interference in monetary policy, low external liquidity, and weaker governance indicators in the country are set against low government debt, a record of sustaining access to external financing, a resilient banking sector, and relatively high GDP per capita.

Sources:

1. Turkish Statistical Institute (TURKSTAT)
   1. Housing Sales Statistics, July 2025: https://data.tuik.gov.tr/
   2. Building Permit Statistics, Quarter II: April-June, 2025: https://data.tuik.gov.tr/
   3. Consumer Price Index, August 2025: https://data.tuik.gov.tr/
   4. Labor Force Statistics, July 2025: https://data.tuik.gov.tr/
   5. Annual Gross Domestic Product, 2024: https://data.tuik.gov.tr/
2. Central Bank of the Republic of Turkey (CBRT)
   1. Residential Property Price Index, July 2025: https://www.tcmb.gov.tr/
   2. Monthly Money and Banking Statistics: https://www.tcmb.gov.tr/
   3. Interest Rate and Profit Rate Statistics: https://www.tcmb.gov.tr/
   4. Press Release on Interest Rates, July 24, 2025: https://www.tcmb.gov.tr/
   5. Inflation Report, 2025 - III: https://www.tcmb.gov.tr/
3. Republic of Türkiye Ministry of Trade
   1. Economic Outlook, May 2025: https://www.trade.gov.tr/
4. Official Gazette of the Republic of Türkiye
   1. Decision on Approval of the Medium-Term Program, 2026-2028 (TR): https://www.resmigazete.gov.tr/
5. International Monetary Fund (IMF)
   1. Country Overview: Turkey: https://www.imf.org/
   2. 2024 Article IV Staff Report: https://www.imf.org/
   3. World Economic Outlook Update, July 2025: https://www.imf.org/
6. World Bank
   1. Turkey MPO, April 2025: https://thedocs.worldbank.org/
7. Organization for Economic Co-operation and Development (OECD)
   1. OECD Economic Surveys: Türkiye 2025: https://www.oecd.org/
8. European Central Bank (ECB)
   1. Turkish lira/Euro, Monthly: https://data.ecb.europa.eu/
9. Federal Reserve Economic Data (FRED)
   1. US Dollar Exchange Rate: Average of Daily Rates: National Currency: USD for Turkey: https://fred.stlouisfed.org/
10. Housing Developers and Investors Association (KONUTDER)
    1. 6-Month Outlook Indicators: KONUTDER Members' Housing Sector Expectations H1 2025 Report (TR): https://konutder.org.tr/
11. Bahcesehir University Center for Economic and Social Research (BETAM)
    1. Sahibindex Rental Housing Market Outlook, August 2025 (TR): https://betam.bahcesehir.edu.tr/
12. Fitch Ratings
    1. Fitch Affirms Turkiye at 'BB-'; Stable Outlook: https://www.fitchratings.com/
13. Reuters
    1. Exclusive: Turkey's Simsek Says Determined to Maintain Lasting Disinflation Process: https://www.reuters.com/
    2. Goldman Lowers Turkish Rate Cut Expectations, Citing Inflation, Strong GDP: https://www.reuters.com/
    3. Turkey Forecasts 28.5% Inflation This Year, Single Digits by 2027: https://www.reuters.com/
    4. Turkey's Main Opposition Calls for Rallies After Police Barricade Istanbul Office: https://www.reuters.com/
14. Milliyet
    1. Breaking News: Minister Şimşek's Statement on Interest Rates, Rental Prices, and Loans (TR): https://www.milliyet.com.tr/
15. Omran Trk
    1. If Interest Rates Drop to 25%, Real Estate Market Will Begin to Rise (TR): https://www.omrantrk.com/
16. Anadolu Agency
    1. Home Sales Hit Year-to-Date High in July (TR): https://www.aa.com.tr/
    2. Housing Sales to Foreigners Hit Lowest Figure in 7 Years (TR): https://www.aa.com.tr/
17. Bigpara
    1. Huge Increase in Housing Production. Activity Begins at Construction Sites. (TR): https://bigpara.hurriyet.com.tr/
    2. 500,000 Social Housing Units Are Coming (TR): https://bigpara.hurriyet.com.tr/
18. Sozcu
    1. Real Estate Expert Announced: Housing Prices Will Increase by 50 Percent (TR): https://www.sozcu.com.tr/