In recent years, the real estate sector of Turkey has fluctuated drastically. From 2021 to 2022, Turkey topped global charts for house prices with 46% nominal gains annually. However, as inflation was above 50%, real values adjusted for purchasing power actually fell by 14% per year. This had an impact on local affordability and caused a market slowdown in 2023 with economic uncertainty and increasing borrowing costs seeing property sales fall by 17% to 1.23 million units.
By 2023, average mortgage rates in Turkey surpassed 30% with only cash-buyers being active in the market. Projects developed to cater towards middle-income families were put on hold and property resales from sellers needing cash were marketed at heavy discounts. This created opportunities for cash buyers and wealthy individuals.
Despite this slow down, average property prices in Turkish Lira terms continued to rise during 2023 to 2024. However, these increases were mostly alongside inflation – prices in real terms remained flat or even slightly declined.
Macroeconomic Reforms and Inflation Outlook
By mid-2023, Turkey drastically changed policy – embracing orthodox monetary policies and fiscal discipline in order to tackle inflation. The Central Bank of Turkey raised rates and the government tightened spending. Releasing a Medium-Term Economic Plan, the government announced aims to reduce inflation from 50% in 2023 to 9% by 2026 and to stabilise the currency.
These actions quickly restored international confidence in Turkey. In 2024, Fitch, S&P, and Moody’s all upgraded Turkey’s credit ratings and general outlook – noting improved fiscal measures and anti-inflation actions from the government.
This projected stability is important for the Turkish real estate market. As inflation lowers, property prices will see real gains in value instead of nominal gains – restoring local buyer confidence and catching the attention of foreign investors once again. If current policies and targets are met, the economic environment will be far more stable in 2026 than it was in 2022 – resulting in a revitalised and healthy market.
Housing Supply and Demand Imbalance
Due to a weak Turkish Lira, expensive imports, and high construction costs, housing production in Turkey in recent years has only met half of the annual demand needed – causing a structural housing shortage with fewer new real estate projects launched.
This unique supply and demand imbalance is expected to continue heading into 2026, and is likely to prevent any major price devaluations. Alongside this, post-earthquake reconstruction following the February 2023 quakes only redirects resources to replace lost housing rather than build new stock. Urban regeneration and new building codes will sustain development in major cities.
Turkey’s population is young and looking to move out. Ongoing urbanisation throughout the country and rural-to-urban migration fuels high demand for properties. Housing shortages, new safety-driven projects, and high local demand will keep the Turkish real estate market strong for years as conditions change.
Domestic Demand and Interest Rates
In 2023, interest rates were high, pricing out most mortgage-dependent buyers, and as a result, domestic demand hit bottom. Data shows that property sales fell to 1.23 million units in 2023. Signs of a recovery emerged by the middle of 2024 and in early 2025, monthly house sales exceeded 110,000 units. The market is set to see over 1.6 million transactions in 2025. This is an increase of 30% compared to 2023.
Experts suggest that the key driver of future growth will be strategic monetary easing. Policy rates peaked in 2024 at 46% and are expected to gradually fall with targets of 35% by the end of 2025 and 25% by the end of 2026 as inflation lowers. This will see mortgages become more affordable for local Turks – unleashing demand from the middle-class and families looking to buy homes. With lower rates, developers will be able to restart projects targeted towards the middle-class, improving the supply and demand dynamics.
Historical data suggests that when interest rates fall, a real estate boom in Turkey is usually sparked. Investors saw it before, and a similar trend is anticipated in 2026. However, in order for this to happen, cuts need to be gradual to avoid reigniting inflation. With disciplined policy, a strong recovery in the real estate market is almost inevitable.
Foreign Investment Outlook and Return
For years, foreign buyers have been drawn to Turkey by its affordable prices, lifestyle, and Turkish Citizenship by Investment Program. Foreign buyers typically make up 3% to 5% of all house sales in Turkey. However, data shows that in 2024, foreign investors fell to 1.6% due to currency volatility and economic uncertainty.
As macroeconomic stability returns to Turkey, foreign investors are expected to cautiously return to the market in 2026. Declining inflation and the stabilisation of the Turkish Lira will encourage foreign buyers worried about currency risks. With no annual wealth tax, low property taxes, and capital gains tax exemption after five years, Turkey is a highly competitive country to invest in. Prices remain affordable compared to European and Gulf neighbours.
Returning foreigners to Turkey will provide needed liquidity and support real estate prices in premium locations including: Istanbul, Antalya, and Bodrum. While demand will always stay below 10% of total sales, buyers from Europe, the Middle East, and Russia are expected to dominate the foreign buyer market – attracted to the lifestyle, connectivity, and motivated by geopolitical factors.
Prices and Investment Outlook Through 2026
Experts expect nominal price growth to continue from 2024 to 2026. However, if inflation falls as projected, real estate in Turkey will finally return to real price growth. Investors who enter the market from 2024 to 2025 will start to see real capital gains by 2026.
Turkey’s property market could transition into a sustainable long-term growth cycle should inflation stabilise to single digits and rates fall to levels that are manageable. Experts and analysts suggest that the sector’s market value could grow at 11% Compound Annual Growth Rate (CAGR) from 2025 to 2030. This would see the market value double from $110 billion USD to $187 billion USD.
Key Growth Drivers in Turkey
Looking at the potential of Turkey’s real estate market from 2026 and beyond, several structural factors need to be considered and studied in order to measure true value.
- Demographics: Turkey has a large and youthful population. This drives households and creates an organic demand for new housing.
- Urbanisation: Young Turks living in rural areas continue to migrate to larger cities for work or studying, increasing city populations and boosting the need for housing.
- Infrastructure Development: Mega projects in Turkey such as Istanbul Airport, Istanbul Canal, and new highways create growth corridors and increase land value between cities.
- Tourism Recovery: Turkey is one of the most-visited countries around the world. A strong recovery post-pandemic boosts tourism and demand for costal properties.
- Investor Incentives: Turkey’s Citizenship by Investment Program is one of the most popular global residency and passport programs. Tax advantages and VAT exemptions make Turkey attractive.
Regional Breakdown: Where to Invest in 2026
The real estate landscape in Turkey is diverse with several cities and areas catering to different investment strategies, profiles, and buyer needs. 2026 is expected to see continued investment in established, as well as emerging property markets throughout the country. Here’s the top locations to invest in:
- Istanbul: The largest city in Turkey and it’s economic heart. Istanbul is the top destination for local buyers as well as foreign investors. Urban regeneration districts including Kağıthane, Eyüp, and some parts of Beyoğlu offer excellent value. Metro expansions continue to drive growth and new corridors across the city.
- Antalya: The second largest city in Turkey and a favourite amongst lifestyle buyers as well as those retiring to the sun. Antalya is a year round working city and one of the most-visited in all of Europe, accessed via the newly upgraded Antalya Airport. Demand is high for costal homes as well as short-term rentals in areas including Konyaaltı and Lara Beach.
- Bodrum: Appealing to wealthy investors and those seeking luxury homes, Bodrum offers stunning villas, often with sea views and private swimming pools. Within Bodrum is the famous Yalikavak Marina and numerous Blue Flag beaches. Limited supply and growing demand will see prices in Yalikavak, Gumusluk, and Bodrum Town continue to rise in 2026.
- Fethiye: A long-term favourite amongst European and British buyers, Fethiye offers affordable homes and a relaxed lifestyle along Turkey’s coast. Home to the world famous Blue Lagoon at Oludeniz Beach, Fethiye is easily accessible using Dalaman International Airport. Popular areas include Fethiye Town, Calis, and Ovacik.
- Izmir: One of Turkey’s most cosmopolitan cities, Izmir offers a unique blend of lifestyle appeal and affordability. Middle-class Turks and expats are attracted to areas including Bornova and Çeşme with new infrastructure upgrades.
All the data points to 2026 being the year for a strong recovery for Turkey’s real estate market. Of course, risks remain. However, the baseline forecast for Turkey is positive – the country is transitioning to a stable growth trajectory based on fundamentals instead of cycles. With economic reforms and stability, the outlook is defined by:
- Disinflation and Currency Stability: If inflation drops to single digits, returns in real terms will be restored to the market.
- Falling Interest Rates: If borrowing costs drop lower, developers will re-start projects and domestic buyers will return.
- Return of Foreign Investors: Foreign buyers are watching and waiting. Improved confidence and incentives will see overseas demand increase.
- Supply-Demand Tension: With more demand than available supply, housing prices are set to remain stable even in a cooling economy.
For local and international investors, 2025 offers a strategic entry point to the property market, before 2026 marks the start of a sustainable phase of expansion, measured growth, and stability. For more information and tailored opportunities to suit your needs and budget, please enquire today to speak with our local advisors at Property Turkey.
Cameron Deggin Founder & CEO, Property Turkey
Cameron Deggin is Founder and CEO of Property Turkey. A former finance professional and FCCA-qualified accountant, he founded the company in 2001 after recognising Turkey’s investment potential. With more than two decades analysing Turkish real estate, Cameron regularly advises international investors and is quoted by media including the Financial Times and BBC.
By:
Founder & CEO, Property Turkey
Fethiye 
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