Turkey Residential Real Estate Market Analysis 2024

Turkey's seemingly strong house price growth is just an illusion, when in fact, real values are actually falling by double-digit figures. This is mainly due to persistent hyperinflation in the country.

Table of Contents

Housing Market Snapshot


In July 2024, overall inflation was still extraordinarily high at 61.8%. From an annual average of just 10.9% from 2003 to 2021, inflation surged to a whopping 72.3% during 2022 and remained elevated since.

Turkey's house price annual change

As such, Turkey's nationwide house prices rose by a whopping 42% in May 2024 from a year earlier, to an average of TRY 33,460 (US$999) per square meter (sqm), according to the Central Bank of the Republic of Türkiye (CBRT), following y-o-y increases of 71.7% in 2023, 178.6% in 2022, 64% in 2021, 32.6% in 2020, and 2.9% in 2019.

However, there is a huge difference between the nominal and real figures. When adjusted for inflation, nationwide house prices actually plummeted by 19% during the year to May 2024.

In Turkey's major cities:

  • In Istanbul, Turkey's largest city and most expensive housing market, the average house price soared by 31.6% during the year to May 2024 to TRY 47,299 (US$1,412) per sq. m. But when adjusted for inflation, house prices were down by 25% y-o-y.
  • In Ankara, the country's capital, house prices skyrocketed by 52.6% y-o-y in May 2024 to an average of TRY 26,930 (US$804) per sqm. When adjusted for inflation, house prices dropped 13%.
  • In Izmir, the country's third largest city, house prices were up by 43.3% y-o-y in May 2024 to TRY 38,874 (US$1,161) per sqm. Yet house prices actually declined by 18.3% in real terms.

New dwelling prices rose strongly by 48.8% (but fell by 15.2% in real terms) y-o-y in May 2024 while existing dwelling prices increased by 45.4% (but dropped 17.1% inflation-adjusted).

Turkey Annual House Price Change in Major Cities graph

Demand for residential properties in Turkey continues to weaken, with the total number of home sales falling by 17.5% to 1.23 million units in 2023 from a year earlier, far worse than the y-o-y declines of 0.4% in 2022 and 0.5% in 2021, according to the TurkStat. The weakness of demand continues this year. In the first half of 2024, home sales were down by 3.7% y-o-y to 545,074 units.

Foreign demand is also plunging. During 2023, foreign home purchases in Turkey dropped by a whopping 48.1% to 35,005 units as compared to 67,490 units sold in the prior year. Then in the first half of 2024, foreign home purchases in the country fell further by 45.7% y-o-y to just 10,461 units, indicating that property demand from foreigners remains depressed this year.

Yet, the overall economy continues to grow. Turkey's economy grew by about 4.5% during 2023, following annual expansions of 5.5% in 2022, 11.4% in 2021, 1.9% in 2020, and 0.8% in 2019, buoyed by strong household spending and improved investor confidence, based on figures released by the International Monetary Fund (IMF). The IMF projects the Turkish economy to expand by a modest 3.6% in 2024 - more optimistic as compared to the World Bank's forecast of a 3% growth.

Turkey Residential Property Prices graph

Demand Highlights


Demand is falling rapidly

Residential property demand continues to weaken in Turkey, with the total number of home sales falling by 17.5% to 1.23 million units in 2023 from a year earlier, far worse than the y-o-y declines of 0.4% in 2022 and 0.5% in 2021, according to the TurkStat.

Over the same period, sales of new houses fell by 17.5% y-o-y to 379,542 units while second-hand house sales also dropped by 17.5% to 846,384 units.

There are wide regional variations, but demand is falling in most of Turkey's major cities in 2023:

  • In Istanbul, which has more than 16% share of transactions, home sales fell sharply by 23.5% y-o-y to 198,739 units.
  • In Ankara, which accounted for a market share of 9.3%, the number of home sales dropped 9.3% y-o-y to 114,432 units.
  • In Izmir, which represented more than 5% of the market, home sales fell sharply by 21.6% y-o-y to 65,465 units.
  • In Antalya, which also captured more than 5% market share, the number of home sales dropped by 19.6% y-o-y to 64,721 units last year.
  • In Bursa, which took 3.7% of the market, home sales declined by 16.3% y-o-y to 45,416 units.
  • In Mersin, which accounted for nearly 3% of the market, home sales fell by 13.1% y-o-y to 34,990 units.

The weakness of demand continues this year. In the first half of 2024, home sales were down by 3.7% y-o-y to 545,074 units, based on TurkStat figures.

In H1 2024, sales of new houses increased slightly by 1.3% y-o-y to 173,324 units while second-hand house sales continued to fall by 5.8% to 371,750 units.

Turkey House Sales graph

Foreign homebuyers plummeting

During 2023, foreign home purchases in Turkey plunged by a whopping 48.1% to 35,005 units as compared to 67,490 units sold in the prior year, based on figures released by TurkStat. This was in stark contrast to the robust y-o-y growth of 15.2% registered in 2022 and 43.5% seen in 2021.

As a result, foreign homebuyers' share of the market fell to less than 3% in 2023, down from 4.5% in the prior year.

Then in the first half of 2024, foreign home purchases in the country fell further by 45.7% y-o-y to just 10,461 units, indicating that property demand from foreigners remains depressed.

Except for the years 2016 and 2020 due to the Covid-19 pandemic, property sales to foreigners have been generally rising in Turkey. Foreign buyers had been buying large amounts of Turkish property, mirroring a substantial increase in Gulf tourism. As the Lira has fallen, visitors have been attracted to Turkey. Istanbul is now so full of Arab visitors that it resembles a Gulf city, with Arabic spoken in shops, and restaurants catering to Gulf tastes.

Between 2013 and 2022, foreign home purchases more than quadrupled from 12,181 units to about 67,490 units. Russians, Iranians, and Iraqis accounted for almost one-third of the total foreign purchases during the period. They regard Turkey as a safe haven and they feel culturally close to the country.

Turkey House Sales to Foreigners graph

In the first half of 2024, the Russians led the foreign home purchases in Turkey, representing about 23% share. The Iranians were a distant second, with a market share of 10.1%. They were followed by the Ukrainians with a market share of 6.9%, Germans with a 4.7% share, Iraqis also with a 4.7% share, and Kazakhstanis with 4.5% share.

With the surge in Russian homebuyers, Turkish banks began to open ruble accounts.

Most foreign buyers bought dwellings in Antalya, accounting for about 37% of total sales in H1 2024, followed by Istanbul (34.5%), Mersin (9%), Ankara (2.4%) and Yalova (2.3%).

Turkey House Sales to Foreigners by Province graph

Foreign homeownership rules eased

It was only in 2002 that the Turkish property market was first opened to foreign buyers. But they were only allowed to purchase properties in a few zones, and under the "reciprocity clause". This means that only nationals of countries allowing Turkish citizens reciprocal rights - like Britain, Germany, and the Netherlands - were allowed to buy properties. In 2005, the zones were abolished, but reciprocity remained.

The reciprocity requirement was finally abolished in August 2012, and since then nationals from 183 countries have been allowed to buy properties in Turkey. Nationals of China, Russia, India, and Gulf Arab states, previously banned because of the reciprocity rules, are now allowed. The size of land foreigners can buy without special permission was increased to 33 hectares, up from 2.5 hectares.

Tens of thousands of foreigners have successfully acquired properties in Turkey, most notably in the Marmara and Mediterranean regions, Turkey's major finance and tourist hubs.

"The regulation easing requirements for foreigners to acquire Turkish citizenship, the volatility in the Turkish lira against other currencies, and the VAT exemption for foreigners helped spur the sales," said Melih TavukçuoÄŸlu, head of Istanbul's Asian-side Contractors' Association.

Turkey has granted citizenship to foreigners through various means since January 2017, which includes purchasing property worth at least US$1 million. During the same year, the government introduced other measures to entice foreign homebuyers:

  • Reduction of Land Registry's title deed fees from 2% to 1.5%, which are payable by both the buyer and the seller (or around 3% in total).
  • VAT exemptions for property owners who buy a Turkish property but do not live in Turkey, on the condition that they pay for the property with foreign currency. Homebuyers must also hold the property for 12 months after purchase.
  • Stamp duty for "promise to sell agreements" reduced to 0%, from 0.95%.

New regulations were introduced in September 2018 cutting the investment amount required for Turkish citizenship:

  • Purchasing real estate worth at least US$250,000 now gives you citizenship.
  • Or a fixed capital investment of US$500,000
  • Or keeping at least US$500,000 in a Turkish bank account for a minimum of three years, down from the earlier cap of US$ 3 million;
  • Or generating 50 jobs, down from 100 jobs.

However effective June 13, 2022, the minimum threshold to obtain citizenship through real estate investment was raised from US$250,000 to US$400,000. This was amidst the surge in foreign interest in buying a home in Turkey during 2021-22.

To obtain residency in the country through real estate, foreign buyers need to invest a minimum of US$50,000. The amount increases to US$75,000 for purchases in metropolitan cities like Istanbul, Ankara, Izmir, Mugla, and Antalya. Though effective October 16, 2023, the minimum investment to become a resident was raised to US$200,000 across all cities in Turkey.

Price variations in primary and secondary markets

In May 2024, new dwelling prices in Turkey surged by 48.8% compared to a year earlier, following annual increases of 80% in 2023, 161% in 2022, 66.7% in 2021, 31.6% in 2020, and 10.7% in 2019. However, in real terms, new dwelling prices fell by 15.2% y-o-y over the same period.

For new dwellings:

  • In Istanbul, new dwelling prices were up 38.9% (but dropped 20.8% inflation-adjusted) y-o-y in May 2024.
  • In Ankara, nominal prices surged 40.6% y-o-y in May 2024 but fell by 19.8% when adjusted for inflation.
  • In Izmir, nominal prices climbed by 45.5% but declined by 17.1% in real terms.

The same pattern is observed in the secondary market. In May 2024, nationwide existing dwelling prices increased by 45.4% y-o-y, after registering an annual growth of 76.1% in 2023, 169% in 2022, 57.9% in 2021, 30.2% in 2020, and 8.8% in 2019. However, in real terms, prices were down by 17.1%.

For existing dwellings:

  • In Istanbul, existing dwelling prices increased by 35.1% (but fell by 23% inflation-adjusted) in May 2024 from a year earlier.
  • In Ankara, existing dwelling prices rose by a huge 54.5% over the same period (but actually declined by 11.9% in real terms).
  • In Izmir, nominal prices rose by 47.4% (but fell by 16% inflation-adjusted).

Turkey New and Existing Dwelling Price Indices graph

Supply Highlights


Residential construction activity increasing

Surprisingly, construction activity continues to increase, despite weak demand. During 2023, the total number of dwelling units in residential buildings granted with construction permits in Turkey rose strongly by 22.3% to 855,265 units from a year earlier, according to figures from TurkStat. This is in contrast with an annual decline of 3.8% in 2022.

Residential construction activity continues to strengthen this year. In the first quarter of 2024, dwelling permits rose further by a huge 35.5% y-o-y to 178,598 units.

In Q1 2024:

  • One-dwelling residential buildings: 10,786 dwelling units, up by 11.3% from the same period in the prior year.
  • Two- or more dwelling buildings: 167,376 dwelling units, up strongly by 37.5% from a year ago.

The total number of residential construction permits rose by 19.9% y-o-y to 28,662 in Q1 2024, following an annual increase of 9.1% in 2023, a decline of 7.7% in 2022, and strong growth of 44% in 2021 and 72.6% in 2020.

Turkey Number of Dwelling Units in Residential Buildings Granted graph

The luxury housing tax came into effect

The luxury housing tax and other tax measures entered into force in January 2021. It is imposed on residences with a value of over TRY 5.25 million (US$156,768). The following shows the revised tax rates:

  • Residential properties valued below TRY 5.25 million (US$156,768) are tax-exempt.
  • Residential properties valued between TRY 5.25 million (US$156,768) and TRY 7.87 million (US$235,003) are taxed 0.3% of the amount over the base level.
  • For properties worth up to TRY 10.5 million (US$313,537), an extra tax rate of 0.6% is levied for the amount over TRY 7.87 million (US$235,003).
  • Houses with a value of more than TRY 10.5 million (US$313,537) are taxed TRY22,500 (US$672) plus 1.0% of the amount over the base level.

There are some exemptions. Those who own only one residence will not be subject to the said tax. Moreover, those who own more than one residence will not be subject to the luxury housing tax on whichever residence has the lowest value.

Rental Market


Good gross rental yields

Turkey's rental yields are good, with a nationwide average gross rental yield of 7.13% in Q2 2024, up from 6.36% in the previous quarter, according to a recent Global Property Guide research.

In Istanbul, the gross rental yields on apartments - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - range from 3.75% to 9.72% with a city average of 6.63% in Q2 2024. This is slightly higher as compared to the city average of less than 6% recorded in the past two years.

In other major cities:

  • In Ankara, gross rental yields fall between 6.31% and 10.32%, with a city average of 8.19%.
  • Antalya produces rental yields between 3.25% and 6.94%, with a city average of 5.17%.
  • Izmir's rental yields range from 5.67% to 9.53%, with a city average of 7.22%.
  • In Adana, gross rental yields are between 6.36% and 9.99%, with a city average of 8.12%.
  • In Konya, gross rental yields range from 4.66% to 9.38%, with a city average of 7.08%.
  • In Bursa, rental yields range from 6.38% to 7.49%, with a city average of 6.87%.
  • Kayseri yields are between 6.45% and 9.23%, with a city average of 7.72%.

Round-trip transaction costs are reasonable in Turkey.

Mortgage Market


Residential mortgage growth slowing rapidly

The growth of the country's residential mortgage loans is slowing sharply and the size of the mortgage market relative to GDP is now shrinking.

In June 2024, the total value of outstanding housing loans increased by 1.9% to TRY 446.52 billion (US$13.33 billion), a sharp slowdown from y-o-y growth of 21.7% by end-2023, 20.4% in 2022, 7.5% in 2021, 39.7% in 2020, and 5.8% in 2019, based on figures from the Central Bank of the Republic of Turkey (CBRT).

By type of financial institution (as of June 2024):

  • Deposit banks: total housing loans outstanding were up by just 1.1% y-o-y to TRY403.38 billion (US$12.05 billion), a sharp slowdown from an annual growth of 20.1% in 2023.
  • Participation banks: housing loans outstanding were up by 9.6% y-o-y to TRY43.14 billion (US$1.29 billion), a deceleration from an annual growth of 38.4 in 2023.
  • Development and investment banks: housing loans outstanding fell by 5.8% y-o-y to TRY6.02 million (US$179,610), in contrast to a huge growth of 332.3% in 2023.

Over the past seventeen years, housing loans in Turkey have grown by an annual average growth of about 23% from 2005 to 2023. Despite this, the size of the mortgage market relative to GDP has shrunk to below 2% in 2023, from 5.8% in 2016 - an indication that, on average, the economy is still growing faster than the residential mortgage market.