Turkey's Residential Real Estate Market Analysis 2026

Turkey's housing market has lost the momentum it built in 2025. The war in the Middle East pushed up energy prices and inflation from March, the central bank stopped cutting interest rates for nine months, and mortgage rates rose from about 34% to almost 42%. Home sales fell by 7.2% in the first nine months of 2026, and house prices are now falling faster in real terms than at the start of the year.

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

• Property Prices and Price Index
• Historic Perspective
• Property Demand Trends
• Property Supply Trends
• Rental Market: Rents and Rental Yields
• Mortgage Market and Interest Rates
• Economic and Social Factors

Property Prices and Price Index

In our March 2026 edition, the Central Bank of the Republic of Turkey (CBRT) had just paused a rate-cutting cycle, mortgage rates were falling, sales had hit a record in 2025 and some analysts expected the real decline in house prices to end. Eight months later, most of that has reversed. Mortgage rates are higher, sales are lower, and price growth has slowed further below inflation. The CBRT made its first rate cut since January only on 22 October.

Turkey's house price annual change:

The CBRT's Residential Property Price Index (RPPI) rose by 22.3% in the year to September 2026. With consumer prices up 29.73% over the same period, homes actually lost 5.7% of their value in real terms, a steeper fall than the 3.93% recorded in February, when nominal growth was still 26.36%. Prices rose by 1.2% from August to September.

Istanbul has overtaken Ankara as the fastest-growing of the three largest cities. Prices there rose by 26.8% in the year to September, ahead of Ankara (22.0%) and Izmir (21.0%). Once inflation is taken into account, that leaves Istanbul down 2.3%, Ankara down 6.0% and Izmir down 6.7%. Back in February, Ankara had led the field with growth of 29.69%.

Price growth was weaker than inflation in every one of the CBRT's 19 regions. Outside the three big cities, the strongest growth was in the region around Trabzon on the Black Sea coast (26.2%) and in the earthquake-hit provinces of Hatay, Kahramanmaras and Osmaniye (24.0%). The weakest was in Edirne, Kirklareli and Tekirdag, near the border with Europe, at 15.3%. The Antalya region, the main market for foreign buyers, saw growth of 20.0%, and the Aydin, Denizli and Mugla region 19.3%.

House price growth, selected areas:

Households still expect prices to rise, though by a little less each month. In October, they expected an increase of 30.36% over the next 12 months, the CBRT's Household Expectations Survey showed, down from 39.2% in January and 35.4% in February. That figure has fallen in every month of 2026 except April. At the same time, 35.6% of households said they planned to buy a home, shop or land, up 2.0 percentage points from September.

For buyers paying in dollars, the weaker lira has offset much of the rise in local prices. A dollar cost TRY 48.2326 on 4 September 2026, using the CBRT's indicative rate, up 11.3% from TRY 43.3414 on 30 January. All dollar conversions in this article use the 4 September rate, USD 1 = TRY 48.2326. Against the rate used in our previous edition (TRY 42.2256), the lira has lost 12.5% of its dollar value.

Historic Perspective

From the mid-2000s to 2017, Turkey's housing market went through a long expansion. Fast urbanization, large construction programmes and strong household demand pushed up prices, new supply and sales.

From 2018, the market was shaped by economic turbulence. The lira fell sharply in 2018 and again in later years, and consumer inflation rose to very high levels. House prices swung widely in nominal terms, while real prices often fell.

From 2020 to 2022, many households and investors bought property as a hedge against inflation. Together with rising building costs, this produced very large nominal price gains, which were much smaller after inflation and uneven across regions. Sales to foreigners peaked in 2022.

The earthquakes of February 2023 were a major shock. Reconstruction programmes and public housing projects increased building in the affected provinces and changed demand and prices in the regions concerned. Sales were volatile in 2023 and 2024, mortgaged sales fell when credit was tight, and foreign purchases dropped as the rules for residence and citizenship through property became stricter.

In 2025, sales recovered strongly to a record, helped by falling interest rates, while real house prices still declined slightly. In 2026, that recovery stalled: the energy shock from the war in the Middle East pushed up inflation and borrowing costs, and both sales and real prices fell.

Property Demand Trends

Sales are falling

Home sales in Turkey fell by 7.2% in the first nine months of 2026, to 1.09 million units. The figures come from the Turkish Statistical Institute (TURKSTAT), as reported by Hurriyet Daily News. September alone saw 142,390 sales, 9.3% fewer than a year earlier.

The decline is concentrated in existing homes, whose sales dropped by 15.3% in September to 90,871 units. New homes, by contrast, sold 3.9% more, at 51,519 units, and made up 36.2% of the total. Over the first nine months, new-home sales were almost flat, down just 0.6% to 359,913 units.

May was the low point. Sales that month fell by 31.2% to 93,333 units, the lowest monthly total of the year. Market observers blamed high borrowing costs and limited access to housing finance, and said many buyers were holding off in the hope of lower interest rates. Tarik Ongun of developer Nurol GYO pointed to "high interest rates, credit restrictions, and insufficient purchasing power," adding that "for buyers, the real decline in housing prices presents an opportunity, provided they have the financial means."

Part of the fall reflects a higher base. TURKSTAT revises its sales data, and this year's release implies that 156,990 homes were sold in September 2025, rather than the 150,657 first published at the time.

Mortgaged sales are growing from a low base

Mortgaged sales are the one part of the market that has grown. They rose by 25.8% in the first five months of 2026, to 116,801 units, TURKSTAT data showed. As mortgage rates climbed, that growth slowed: in September, mortgaged sales were up 5.1% at 23,397 units, or 16.4% of all sales.

Foreign demand remains small

Foreign buyers purchased 15,308 homes in the first nine months of 2026, 4.3% fewer than a year earlier and about 1.4% of all sales. September brought a rise of 9.9%, to 2,167 units. Russians remained the largest group (388 homes), followed by Iraqis (166) and Germans (162).

Earlier in the year the picture was weaker. In May, sales to foreigners fell by 27% to 1,387 units, leaving them down 15.1% over the first five months.

Property Supply Trends

Permits have turned down

The building boom of 2025 is slowing. In Q2 2026, 280,463 homes received construction permits, 9.5% fewer than a year earlier, TURKSTAT figures reported by Bigpara show. It was the first fall after four quarters of growth. The number of buildings permitted fell by 2% and their floor area by 7.4%. Over H1 2026 as a whole, permits were issued for 514,813 homes.

Completions are rising, but slowly

Completed supply is still growing. In Q2 2026, 144,150 homes received occupancy permits, up 10.7% from a year earlier, bringing the H1 total to 307,440. That is well below the number of homes permitted, and well below the 800,000 to 1 million new homes a year that industry representatives say Turkey needs.

The social housing programme

The government's social housing programme, the largest in the country's history, has now chosen its buyers. Lotteries held between 29 December 2025 and 27 April 2026 selected 506,499 households for 500,000 homes in all 81 provinces, the public broadcaster TRT reported. There were 5,242,000 valid applications, more than 10 for every home, including 1,072,660 in Istanbul.

The homes are being built by the state housing agency TOKI. Buyers pay a 10% deposit and the rest over up to 240 months, with monthly payments starting at TRY 7,313 (USD 152) in Istanbul and TRY 6,750 (USD 140) in other provinces. The programme also includes 15,000 social rental homes in Istanbul, to be let below market rents to low-income households, the first scheme of its kind in Turkey. Construction is only now getting under way, so the programme will do little for supply in the near term.

Rental Market: Rents and Rental Yields

Rents are rising more slowly than inflation

Rents for new tenants rose by 26.6% in the year to September 2026, as measured by the CBRT's New Tenant Rent Index (NTRI). Because consumer prices rose faster, that was a fall of 2.4% in real terms.

Turkey's rent price index:

Istanbul is the exception. New-tenant rents there rose by 35.5% over the year, and by 3.5% in September alone. Growth was much slower in Ankara (25.1%) and Izmir (23.7%), and slowest of all in Edirne, Kirklareli and Tekirdag (18.8%).

Rent inflation for all tenants, as measured in the consumer price index, has also been easing steadily, from 53.91% in February to 47.87% in June. By October, the central bank noted that "rent inflation continued its downward trend," with seasonally adjusted monthly increases now in line with overall inflation.

Rents are still rising faster than house prices: 26.6% for new tenants against 22.3% for prices. That has pushed up rental yields.

Rental yields have risen

Gross rental yields on apartments averaged 7.86% in Q3 2026, Global Property Guide research shows, up from 7.33% in Q1 2026. Istanbul offered the highest yields, at 9.92%, followed by Ankara (8.51%) and Adana (8.06%). Antalya, popular with foreign buyers, had the lowest, at 6.57%.

Mortgage Market and Interest Rates

The CBRT has resumed cutting rates

On 22 October 2026, the CBRT cut its policy rate, the one-week repo rate, from 37% to 36%. It was the first cut since January, when the rate came down from 38% to 37%. In between, the rate was left unchanged at six meetings: in March, April, June, July and September.

Turkey's mortgage loan interest rates:

Explaining the October cut, the CBRT said recent data "confirm the deceleration in the underlying trend of inflation." It warned, however, that "elevated energy prices due to ongoing geopolitical tensions continue to pose an upside risk to the inflation outlook," and that policy would stay tight "until price stability is achieved," with decisions taken meeting by meeting.

Mortgage rates have gone up, not down

Mortgage rates have moved in the opposite direction to the policy rate. The average interest rate on housing loans was 36.3% in mid-January and fell to 34.2% by early March. Once the conflict in the region escalated, banks raised their rates: to 36.8% by mid-April, 39.3% by early June and 41.9% by early September. In the week to 16 October, the average stood at 41.5%, the CBRT's weekly data show.

That leaves mortgage rates 5.5 percentage points above the policy rate and well above inflation, which makes buying with a loan very expensive. The October rate cut may bring some relief, but the CBRT has made clear that it will move cautiously.

Lending growth has slowed

Higher rates have slowed bank lending to households. The average four-week growth rate of retail loans dropped to 1% by mid-October, down from 3.2% in the period to mid-April.

Mortgages still play a small role in Turkey's housing market. Even after this year's growth, only 16.4% of homes sold in September were bought with a mortgage.

Economic and Social Factors

Growth has slowed

The war has cut Turkey's growth outlook. In October, the International Monetary Fund (IMF) projected growth of 2.7% in 2026, down from 3.7% in 2025, followed by a recovery to 3.6% in 2027. The government is more optimistic: its Medium-Term Programme, published in September by the Presidency of Strategy and Budget, expects growth of 3.3% in 2026 and 4.2% in 2027.

The economy grew by 2.3% in Q2 2026 from a year earlier, with the CBRT pointing to "an evident deceleration in consumption." By October, it described domestic demand as weak. Unemployment stood at 8.1% in July, and the Medium-Term Programme expects the same rate for 2026 as a whole.

Inflation has stopped falling

Inflation fell steadily through 2025 but has made little progress this year. Annual consumer price inflation was 29.77% in October 2026, CBRT figures show, barely below the 30.65% of January. After the energy shock, it climbed to 32.61% in May before easing again. A year earlier, in October 2025, it was 32.87%.

Energy is the main reason. Brent crude averaged about USD 127 a barrel in early October, up from about USD 117 in September, and energy prices rose by 6.25% in September alone. Services inflation, which includes rents, was still running at about 38%.

Energy is the main reason. Brent crude averaged about USD 127 a barrel in early October, up from about USD 117 in September, and energy prices rose by 6.25% in September alone. Services inflation, which includes rents, was still running at about 38%.

Risks to the outlook

The main risk is the conflict in the Middle East. The CBRT lists the risk of disruption in the Strait of Hormuz, high freight costs and rising farm prices among the threats to its inflation outlook. It also reported that Turkey's gross foreign exchange reserves fell by USD 9.6 billion to USD 169.1 billion in the weeks before its October meeting. In its October World Economic Outlook, titled "Resilience Under Strain, Urgent Choices," the IMF projected that global growth will slow to 3.1% in 2026.

For the housing market, the outlook depends on how fast interest rates can come down. Lower energy prices would let the CBRT cut rates faster, bringing mortgage rates down and helping sales recover. A longer conflict would keep inflation and borrowing costs high, and real house prices would probably keep falling.

Sources:

1. Central Bank of the Republic of Turkey (CBRT)
   1. Residential Property Price Index and New Tenant Rent Index, September 2026: tcmb.gov.tr
   2. Household Expectations Survey, October 2026 (TR): tcmb.gov.tr
   3. Consumer Prices: tcmb.gov.tr
   4. Indicative Exchange Rates, 4 September 2026: tcmb.gov.tr
   5. Indicative Exchange Rates, 30 January 2026: tcmb.gov.tr
   6. Press Release on Interest Rates, 22 October 2026: tcmb.gov.tr
   7. Press Release on Interest Rates, 10 September 2026: tcmb.gov.tr
   8. Press Release on Interest Rates, 23 July 2026: tcmb.gov.tr
   9. Press Release on Interest Rates, 11 June 2026: tcmb.gov.tr
   10. Press Release on Interest Rates, 22 April 2026: tcmb.gov.tr
   11. Summary of the Monetary Policy Committee Meeting, 30 October 2026: tcmb.gov.tr
   12. Summary of the Monetary Policy Committee Meeting, 17 September 2026: tcmb.gov.tr
   13. Summary of the Monetary Policy Committee Meeting, 30 July 2026: tcmb.gov.tr
   14. Summary of the Monetary Policy Committee Meeting, 18 June 2026: tcmb.gov.tr
   15. Summary of the Monetary Policy Committee Meeting, 30 April 2026: tcmb.gov.tr
   16. Summary of the Monetary Policy Committee Meeting, 18 March 2026: tcmb.gov.tr
   17. Summary of the Monetary Policy Committee Meeting, 29 January 2026: tcmb.gov.tr
2. International Monetary Fund (IMF)
   1. World Economic Outlook, October 2026: imf.org
   2. World Economic Outlook, October 2026, Online Statistical Appendix Tables A: imf.org
3. Presidency of Strategy and Budget
   1. Medium-Term Program 2027-2029, Presentation: sbb.gov.tr
4. Global Property Guide
   1. Gross Rental Yields in Turkey: globalpropertyguide.com
5. Hurriyet Daily News
   1. New Home Sales Rise 4 Percent in September (TURKSTAT data): hurriyetdailynews.com
   2. Some 94,000 Homes Sold in May, Market Contracts 31 Percent (TURKSTAT data): hurriyetdailynews.com
6. Bigpara (Hurriyet)
   1. 515,000 Housing Permits Issued in Six Months (TURKSTAT data, TR): bigpara.hurriyet.com.tr
7. TRT Haber
   1. Lottery Process Completed in the Century's Housing Project (TR): trthaber.com