Published on and written by Cyril Jarnias
Amid currency volatility, persistent inflation, and ambitious economic reforms, the Turkish real estate market finds itself at a pivotal moment. The coming years are expected to mark a shift from a high-risk, high-nominal-increase environment to a more stable phase, where real capital gains may finally materialize. For local buyers and foreign investors alike, understanding the dynamics at play has become essential.
A market at a crossroads
The Turkish real estate sector is entering a new phase. After the 2021‑2023 period marked by skyrocketing prices in local currency and inflation above 50%, the country shifted from mid‑2023 toward a more orthodox monetary policy and tighter fiscal discipline. The government’s goal is clear: bring inflation from around 50% in 2023 down to a single‑digit level by 2026‑2027.
The Central Bank of Turkey raised its policy rate to 46% in 2024, a peak marking a turning point in its fight against inflation.
In this context, 2026 is often described by analysts as a pivotal year for real estate. The central assumption: if inflation gradually declines (international projections suggest around 22% in 2026, then toward 15% in 2027), the expected price increases for real estate could this time translate into genuine real gains, rather than simply protection against monetary erosion.
From nominal surge to normalization
To measure the ongoing shift, one must look back at the recent period. Between 2021 and 2022, Turkey topped global rankings with an annual nominal price increase of around 46%. Yet, given inflation above 50%, real home values were actually declining by about 14% per year. Real estate served primarily as a hedge against lira depreciation, rather than as a net‑performance‑generating asset.
In 2022‑2023, property prices in Turkey saw spectacular increases in Turkish lira (+168% then +76%). However, when adjusted for inflation, real property values stagnated or declined. For residents, purchasing was an attempt to preserve their purchasing power. For foreigners paying in hard currency, the depreciation of the Turkish lira created a “discount” effect of 15 to 20% compared to previous years.
Since 2024‑2025, a rebalancing is underway. According to the Central Bank’s Residential Property Price Index, national prices rose by about 32.8% year‑on‑year in summer 2025. At the same time, annual inflation hovered around 33%. The result: a slight real decline of 0.5%, a sign that the phase of real decline is easing. Forecasts for 2026 now anticipate nominal home price increases—depending on the scenario—of between 8% and 25%, with estimated real growth of 5% to 10% if disinflation materializes.
Sales volumes: a rebound driven by domestic demand
After the 2023 slowdown—a year when real estate sales fell by 17% to 1.23 million transactions—the market quickly regained momentum. By mid‑2024 and early 2025, monthly sales were once again exceeding 110,000 units. Between January and July 2025, 834,751 homes changed hands, an increase of more than 24% compared to the same period the previous year.
The percentage share of the secondary market in real estate transactions, illustrating its dominance.
Industry projections are optimistic: the developers’ association (KONUTDER) anticipates more than 1.5 million sales in 2025, with some experts even citing 1.6 million—an increase of about 30% compared to 2023. For 2026, most scenarios point to a sustainably high level above 1.5 million annual transactions, which would bring the market near the top of its historical range (1.2‑1.6 million per year).
The timid return of mortgage lending
For a long time, soaring rates dried up credit. The annual volume of mortgage‑financed sales fell to a decade low in 2024, with only 158,500 transactions. The rates on new housing loans far exceeded 40%, with some commercial institutions reaching over 60% in effective annual rate.
In the first seven months of 2025, mortgage sales surged by more than 93% compared to the previous year.
A market boosted by demographics and urbanization
Beyond monetary variables, Turkish real estate is driven by powerful structural forces. The country has a large and relatively young population—median age around 31—with a fertility rate close to 2 children per woman. Each year, an estimated 800,000 new households are formed, while housing production covers only about half of these needs, creating a structural deficit.
Rapid urbanization and rural exodus exert strong pressure on real estate markets in Turkey’s major metropolitan areas. Istanbul, with over 15‑16 million inhabitants, alone accounts for nearly 17% of national transactions. Other cities like Ankara, Izmir, Antalya, Bursa, and Mersin are also recording rapid growth in activity volumes.
The February 2023 earthquakes added another dimension. In the affected provinces, the reconstruction of about 550,000 homes—nearly half already delivered or under completion—absorbs a significant share of the sector’s resources. This reallocation sometimes slows new production in other regions, but supports demand in relocation zones and heightens awareness of seismic risk, pushing households toward safer new buildings.
Prices: strong regional disparities and gradual catch‑up
National averages mask considerable gaps between regions. In Q2 2025, the average price per square meter stood at 39,697 TRY, approximately 1,025 USD given an exchange rate near 38.7 TRY per dollar. But some areas diverge widely from this benchmark.
This can be visualized through the following data.
Table 1 – Average prices per m² (Q2 2025)
| City / Region | Average price (TRY/m²) | Average price (USD/m²) | Annual increase in TRY |
|---|---|---|---|
| Turkey (national average) | 39,697 | 1,025 | +22.40% |
| Istanbul | 63,125 | 1,630 | +28.83% |
| Ankara | 35,690 | 922 | +33.58% |
| Izmir | 43,970 | 1,135 | +19.50% |
| Antalya | 46,395 | 1,198 | +22.88% |
| Bursa | 32,669 | 844 | +25.24% |
| Mersin | 30,783 | 795 | +18.28% |
| Muğla (incl. Bodrum, Fethiye…) | 79,077 | 2,042 | +9.72% |
Istanbul sits 50 to 70% above the national average, while some eastern provinces still trade at discounts of 40 to 60%. Muğla, home to prestigious coastal resorts like Bodrum and Fethiye, shows significantly higher values, driven by limited land supply, strict zoning regulations, and sustained demand from wealthy Turkish and foreign residents.
Annual nominal increase in residential prices in Ankara in July 2025, the strongest among major metropolitan areas.
A rental market under high tension
Rent increases are at the heart of public debate. Officially, the “actually paid rents” component of the consumer price index was still rising by more than 74% year‑on‑year in August 2025, although the pace is slowing compared to 2024, when it exceeded 120%. In other words, rental inflation remains more than double the headline inflation rate, which stood at 33% over the same period.
In July 2025, the average advertised rent on the Turkish market was 238.8 Turkish lira (TRY) per square meter, approximately 5.9 USD. This value represents a nominal increase of 31.8% year‑on‑year. However, after adjusting for inflation, the data show a slight decline in real terms, indicating a slowdown in the rental housing market.
Table 2 – Average advertised rents (July 2025)
| City | Average rent (TRY/m²) | Average rent (USD/m²) | Annual nominal increase |
|---|---|---|---|
| Turkey (national average) | 238.8 | 5.9 | +31.8% |
| Istanbul | 325.0 | 8.1 | +39.3% |
| Ankara | 242.1 | 6.0 | +36.8% |
| Izmir | 279.1 | 6.9 | +32.6% |
The largest increases in advertised rents are observed in provinces like Samsun, Mardin, Istanbul, Şanlıurfa, or Van, with increases sometimes exceeding 40%. Conversely, cities like Gaziantep record increases well below inflation, reflecting a real decline in rents.
For investors, the gross rental yield picture is fairly favorable. A 2025 study estimates the national average gross yield at around 7.7%, compared to about 7.1% a year earlier. The markets offering the best prospects are Adana (nearly 8.9%), Ankara (8.7%), and Istanbul (just over 8%), while Antalya shows more limited gross yields, around 6.3%, partly due to already high property values in tourist districts.
Foreign demand: a cyclical decline, structural potential
One of the most significant changes in recent years concerns foreign demand. Historically, non‑resident buyers account for 3 to 5% of home sales in Turkey. This share fell to 1.6% in 2024, then to about 1.3% in summer 2025. Between January and July 2025, only 11,267 homes were purchased by foreigners, a decline of just over 12% year‑on‑year.
The reasons for this decline are multiple: rising local prices, increasingly complex residence and citizenship procedures, heightened competition from other countries, insufficient international communication, and the lack of particularly attractive visa regimes for investors.
Bayram Tekçe, president of the GİGDER association
Despite this slowdown, the amounts remain significant: over the first eleven months of 2025, sales to non‑residents would have generated more than 8.5 billion dollars in revenue. And the diversification of nationalities remains notable: Russians in first place (about 17% of foreign purchases in the first seven months of 2025), followed by Iranians, Ukrainians, Germans, and Iraqis.
Table 3 – Sales to foreigners (January–July 2025, selected cities)
| City | Sales to foreigners | Annual change | Share of local sales |
|---|---|---|---|
| Istanbul | 4,126 | –5.3% | 3.0% |
| Antalya | 3,804 | –19.9% | 8.5% |
| Mersin | 913 | –21.3% | 3.1% |
| Ankara | 384 | +21.5% | 0.5% |
| Izmir | 211 | 0.0% | 0.4% |
| Bursa | 224 | –18.8% | 0.8% |
| Muğla | 208 | +10.6% | 1.7% |
Experts generally agree on a scenario of gradual recovery in this demand starting in 2026, though not returning to the peaks of 2022. Most projections place the foreign share at between 5 and 6% of total sales in the medium term, with a ceiling well below 10%.
Citizenship and residence programs: a foundation for the high‑end market
Despite the tightening of certain conditions, residence or citizenship by investment programs remain a pillar of the high‑end segment. The citizenship‑by‑investment program requires a minimum investment of $400,000 in real estate, with a holding period of at least three years and a professional appraisal approved by the Capital Markets Board to confirm the value.
To obtain a residence permit in Turkey through real estate purchase, the minimum investment is USD 200,000. It is mandatory that the property is not located in one of the more than 1,100 neighborhoods classified as ‘closed’ to new applications, which includes some central districts of Istanbul. These conditions, while restrictive, help sustain demand in the high‑end real estate segment.
Furthermore, Turkey retains notable fiscal advantages: no annual wealth tax, relatively low property taxes (often around 0.2% of the cadastral value for residences in major cities, with a range of 0.1% to 0.6% depending on the case), and exemption from capital gains tax for individuals after five years of ownership. However, transfer costs (Tapu fees) remain significant, at around 4% of the declared amount, typically split between buyer and seller.
Cities and regions with sharply divergent profiles
One of the distinctive features of the Turkish market is its great geographical heterogeneity. Istanbul dominates by its size, liquidity, and diversity, but other cities are gradually carving out their own profiles.
Istanbul: economic heart and laboratory of urban regeneration
Istanbul remains the country’s locomotive. Between January and July 2025, the city concentrated nearly 140,000 sales, or 17% of the national total, with an annual increase of more than 24%. The average price per m² reaches approximately 63,000 TRY (1,630 USD), with enormous disparities between neighborhoods.
Central districts undergoing urban renewal, such as Kağıthane, Eyüp, or parts of Beyoğlu, still offer catch‑up opportunities, while premium areas—Beşiktaş, Şişli, certain parts of Kadıköy, or the Bosphorus shores—top out at more than $4,000 per m². Major infrastructure megaprojects (new airport, successive metro extensions, the planned Istanbul Canal) are drawing new growth corridors, particularly to the west and north of the metropolitan area.
Antalya, Alanya, Mersin: the strength of tourism and the coast
Antalya has established itself as one of the epicenters of tourism and residential investment. A major coastal city, it attracts both investors seeking seasonal rental yields and retirees or families looking to settle in a Mediterranean environment. Between January and July 2025, it recorded nearly 45,000 sales (about 5.4% of the national total) and retains the second national rank in foreign purchases, despite a recent decline.
Antalya’s real estate supply is highly varied and segmented by district: Altıntaş, near the airport, is a major hub for new developments; Konyaaltı is a sought‑after waterfront; Lara, a more luxurious segment, sees strong demand for short‑term rentals; and Kepez is a more affordable area undergoing rapid urban development.
Alanya, further to the southeast, appeals to an international clientele—especially European and Russian—in areas like Mahmutlar, Oba, or Kargıcak, where residences with pools, spas, and “5‑star hotel” services are multiplying.
Average price per square meter in Mersin in the second quarter of 2025.
Izmir, Ankara, Bursa, Muğla: between inland metropolises and upscale coastlines
Izmir, a large city on the Aegean coast, combines a strong domestic demand base with lifestyle appeal for expatriates. Its average price hovers around USD 1,135/m², with areas like Bornova or Çeşme targeting the classic residential market and the affluent coastal clientele respectively.
Ankara, the political and administrative capital, offers a more stable market, largely driven by civil servants and the student population. It stands out for particularly strong price increases recently, but its average level remains below that of Istanbul.
Bursa, close to Istanbul and highly industrialized, is seeing its residential market grow rapidly, while Muğla—which encompasses Bodrum, Fethiye, and Marmaris—forms the core of the upscale coastal segment, with values exceeding USD 2,000/m² and luxury villas often priced in hard currency.
Supply and construction: an incomplete ramp‑up
On the supply side, figures show an acceleration in building permits. In the first half of 2025, nearly 461,000 homes received construction permits, an increase of 28% compared to the previous year, and the highest half‑year level since 2017. The vast majority (95%) corresponds to apartment buildings, while single‑family homes remain marginal (5% of permits).
Although the number of building permits is rising, actual home completions are stagnating. About 278,600 homes were completed in the first half of 2025, a level similar to 2024. This lag is mainly explained by the high cost of imported materials, significant financing costs for developers, and the priority given to post‑earthquake reconstruction.
In the medium term, the government intends to partially correct this imbalance with a large‑scale social housing program. A flagship initiative is set to launch at the end of 2025 for the construction of approximately 500,000 subsidized homes, spread across all 81 provinces, with priority in major metropolitan areas where rental tension is most acute.
Investment strategies in flux
Given these dynamics, investment strategies are evolving. Off‑plan purchases—i.e., buying on plan or during construction—are often cited as the most profitable option: capital gains between the launch price and the value upon completion can reach 30 to 45%, over periods of 12 to 24 months. This model is particularly popular in well‑served new neighborhoods (metro lines, business hubs, areas near new airports).
Annual gross yield displayed by aparthotel investments in major cities and coastal resorts.
At the same time, there is a growing appetite for energy‑efficient and earthquake‑resistant new homes. Complexes equipped with home automation, solar panels, water recycling systems, or environmental certifications sell faster and at higher prices, with an estimated premium of about 10% for certain “smart home” features.
The growing role of technology and new regulations
Digitalization is also transforming the sector. Specialized platforms now offer professional photos, 3D tours, and automated valuation models based on artificial intelligence. PropTech startups are developing sophisticated valuation models (such as Endeksa) or augmented marketing solutions (like Emlaksat, which uses Matterport technology for immersive tours).
Blockchain is also beginning to appear to secure certain transactions and limit the risks of documentary fraud, while electronic signatures and digital contracts are becoming more widespread, speeding up processes.
The law now requires a specific permit, formal registration, and enhanced controls for short‑term rentals (≤ 100 days). Platforms like Airbnb remain legal but require strict compliance, under penalty of heavy fines.
Furthermore, to limit the surge in property taxes in major cities, caps have been introduced on the annual revaluation of cadastral values. Despite this, the new 2026‑2029 assessment cycle is expected to bring a significant upward revision of reference values in metropolises like Istanbul, with anticipated increases of 300 to 500% in some neighborhoods, which will translate into higher property taxes paid, even if rates remain unchanged.
A still demanding macroeconomic environment
Even though the overall trajectory is toward stabilization, risks remain. The vulnerability of the Turkish lira is the main factor of uncertainty: a new episode of sharp depreciation could both reignite inflation, reduce real rental returns in local currency, and discourage some international investors. Domestic political tensions, regional geopolitical risks, or a downturn in the global economy are also among the identified threats.
Estimated average annual growth rate for the Turkish real estate sector between 2025 and 2030.
What this means for different buyer profiles
For Turkish households, the combination of rapidly rising rents, decelerating inflation, and property prices rising less quickly than the price index makes homeownership increasingly perceived as a necessity. As Engin Keçeli, head of a developers’ association, sums up, the long‑”repressed” demand due to the cost of credit is now turning into an urgent need for housing.
For foreign investors, the Turkish real estate market has two faces. The persistent weakness of the Turkish lira offers an opportunity to acquire property at a reduced price for holders of strong currencies, especially if anticipating a future stabilization or recovery of the currency. However, this opportunity is offset by growing challenges: increasing administrative complexity, high investment thresholds required for citizenship programs, and heightened competition from other international real estate markets. A selective and well‑informed approach is therefore essential.
In practice, the profiles are clearly segmented:
– European “lifestyle” buyers who favor the Aegean or Mediterranean coast (Bodrum, Fethiye, Antalya, Alanya, Mersin) for second homes and seasonal rentals;
– families from Russia, Ukraine, Kazakhstan, or the Middle East, seeking family apartments in complexes with nearby schools, hospitals, and shopping centers, often in Istanbul or Antalya;
– more purely financial investors, attracted by gross rental yields of 6 to 10% and the potential for capital gains on projects under construction or land along infrastructure corridors.
Outlook: toward a healthier growth cycle
Everything suggests that the Turkish real estate market is undergoing a regime change. The 2020‑2023 cycle, dominated by nominal increases fueled by inflation and monetary anxiety, is gradually giving way to a more predictable environment, where the quality of the location, the legal soundness of the project, the energy efficiency of the building, or connectivity to transportation will matter more than mere protection against depreciation.
If disinflation targets are met and rates fall toward 25% by 2026, the observed nominal increase could translate into real gains for investors who bought during the currency’s weakness. This scenario is supported by the recovery in local demand, the return of credit, and the gradual influx of foreign investors.
In this reconfiguring landscape, Turkey retains rare assets: a still dynamic demography, unfinished urbanization, a position as an energy and logistics hub (notably thanks to Black Sea gas discoveries and new pipelines), and a real estate sector that, in dollars or euros, remains considerably cheaper than comparable European capitals.
For buyers and investors alike, the key will be less about “riding” the next wave of inflation than about rigorously selecting cities, neighborhoods, products, and partners. Because while overall risk is tending to decline compared to previous years, the dispersion between winners and losers in the Turkish real estate market could continue to widen.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
