Dynamics of housing prices in Turkey

Turkey — house prices soar, but sales break records

The Turkish real estate market is experiencing interesting times. According to the Central Bank of Turkey, the Residential Property Price Index (RPPI) rose by an impressive 31.3% in February 2025 compared to the same period last year. At first glance, this may seem like great news for investors and homeowners. However, a closer look reveals that this figure does not reflect the whole picture. When we factor in the rate of inflation, the real value of housing in Turkey actually fell by 5.6% compared to February last year. This means that while nominal prices have risen, the purchasing power of money has fallen even further. In other words, the same amount of money today can buy less square meters than a year ago.

Turkey's real estate market today

• Despite the decline in real prices, demand for real estate in Turkey remains high. In February 2025, 112,818 housing units were sold, 20.1% more than in the same month last year. This impressive increase in sales indicates that interest in Turkish real estate among local and foreign buyers is not waning.
• Particularly noteworthy is the increase in mortgage home sales. In February 2025, 16,778 mortgages were processed for real estate purchases. This indicates that banks are actively lending to home buyers, perhaps in anticipation of further interest rate cuts.

To understand where Turkey's real estate market is heading, there are several key factors to consider:

1. Steady demand from foreign investors — Turkey remains an attractive destination for foreign real estate buyers. Simplified procedure for obtaining a residence permit or citizenship when buying a home of a certain value, favorable prices compared to other Mediterranean countries and the potential for market growth.
2. Slowdown in construction — due to economic uncertainty and rising production costs, many developers have suspended new projects or left the market altogether. This leads to a reduction in the supply of new housing, especially in regions popular with buyers, which may contribute to price increases.
3. Increase in the cost of construction — the cost of construction materials and labor continues to rise, which inevitably affects the final prices of real estate. Developers are forced to put higher costs into the price per square meter in order to maintain the profitability of their projects.
4. Economic conditions — the projected reduction in interest rates and stabilization of the Turkish lira may become additional incentives for buyers and investors. More affordable mortgages and lower risks associated with currency fluctuations could attract new entrants to the market and increase overall demand for housing.

Prospects for the real estate market in Turkey

• Taking into account the above factors, many experts agree that the real estate market in Turkey in 2025 expects stabilization and potential growth. In the long term, the Turkish real estate market remains positive. The country's unique geographical location, developed infrastructure, rich cultural heritage and relatively low housing prices compared to other countries in the region — all this makes Turkey an attractive destination for real estate investment. However, one should not forget about the risks. Geopolitical tensions, possible changes in the regulation of the real estate market and unpredictability of the global economic situation can have a negative impact on the dynamics of prices and demand.
• Investors and buyers should, of course, carefully analyze market trends, take into account individual circumstances and goals, and seek professional support when making decisions. But overall, the Turkish real estate market in 2025 looks promising, offering interesting opportunities for both short and long-term investments.

To summarize, the Turkish real estate market is going through a period of transformation and adaptation to the new economic realities. Despite the current decline in real house prices, record sales volumes and steady demand indicate that investors and buyers still believe in the potential of the Turkish market. Of course, much will depend on the development of the economic situation in the country and the world. If the Central Bank of Turkey manages to curb inflation, stabilize the lira exchange rate and create more favorable conditions for mortgage lending, it could be a powerful impetus for the growth of the real estate market. It remains to follow the development of events and hope that the positive trends that emerged in February 2025, will be further developed. If the circumstances are favorable, the Turkish real estate market may become one of the most dynamic and attractive in the region, offering investors and buyers ample opportunities to realize their plans and achieve their financial goals.