It has been historically proven across global markets that falling interest rates serve as catalysts for renewed growth and interest in real estate. With its combination of strong demographics, urbanisation trends, and a growing demand, Turkey is no different.
Experts and data suggest that as rate cuts begin, the following is set to imminently occur in Turkey: improved affordability, increased mortgage lending, a rise in domestic buying, and an influx of foreign investment. A new real estate wave is set to land on Turkish shores.
Interest Rate Cuts Set to Begin June 2025
According to a Reuters poll involving 38 economists, the Central Bank of Turkey is expected to begin its long-awaited monetary easing cycle at the end of June 2025. The benchmark policy rate is currently at 46%, the highest in decades. This is forecast to be cut by 200 basis points initially, reducing the rate to 44%.
This cut is expected to sign the beginning of an easing cycle, with the benchmark rate expected to drop to 35% by the end of December 2025. Heading into 2026, more reductions could see rates reach 25% by the third quarter. This would represent a complete reversal of tightening policies that were first implemented in 2021.
Data from the Turkish Statistical Institute (TurkStat) revealed predictions of year-end inflation in Turkey below 30%. This aligns with the Turkish Central Bank’s latest movements and targets a return to sustainable growth without overheating the economy.
Market Signals Confirm the Shift
On 11 June 2025, the Turkish Central Bank held a 100 billion Turkish Lira repo auction. This move has been interpreted as a sign of liquidity easing and preparation for the announcement of lower interest rates.
Fuelled by hopes of cheaper borrowing and increase mortgage lending, a strong rally in the Turkish financial markets followed – Bloomberg reported a 5% increase in Turkish banking stocks and the Turkish Lira stabilised further, signalling investor confidence.
In its mid-year report, Fitch Ratings changed Turkey’s outlook from "negative" to "stable". Fitch also predicted interest rates to fall to 33% by the end of 2025, noting improved fiscal discipline and falling inflation. Moody’s also upgraded its outlook for Turkey.
What This Means for Turkish Real Estate
Simply, as interest rates continue to decline, the real estate sector is set to rise, and rise in a strong revival. In recent years, high borrowing costs have reduced local mortgage activity as many potential buyers postpone purchases. The costs have also led to developers delaying new projects. As borrowing becomes cheaper, developers will be able to re-start projects and locals will return to the market.
Data shows that historically, the Turkish real estate market has experienced rapid growth after easing cycles. Following the 2008 global financial crisis, the property market in Turkey saw an average price increase of 12% per year from 2009 to 2013. This was seen again after 2019 rate cuts when Istanbul property prices increased 20% year-on-year to 2021.
Analysts suggest that this new cycle could outperform all previous cycles. Data implies that prices in prime areas of Turkey, such as Kagithane, Levent, and some parts of Sisli in Istanbul could double in the next three to five years. Other prime areas that could see significant price increases include Yalikavak and Gumusluk in Bodrum, along with parts of Izmir and Antalya.
Foreign investment into Turkish real estate surged from the mid-2010s to 2020s. According to data, in 2022, foreigners purchased a total of 67,000 properties in Turkey. By 2024, this fell to 40,000 amid global tightening conditions. A surge in foreign interest and demand is expected following rate cuts and stabilised inflation.
The Turkish Citizenship by Investment (CBI) program is one of the most popular citizenship schemes in the world, allowing foreigners to obtain a Turkish passport by investing at least $400,000 USD in real estate. This becomes even more appealing with declining interest rates and the Turkish Lira’s current valuation.
Turkish property has long been popular amongst Middle Eastern and European buyers seeking to relocate or holiday homes in the sun. A new trend of Asian buyers, particularly from China, are purchasing assets in Turkey for high rental income. Istanbul, Bodrum, Fethiye, and Bursa remain top picks for foreign investors.
Young Population + Long-Term Mortgages = Surge in Demand
With over 85 million people and a median age of just 32, Turkey has one of the youngest populations in Europe and the Middle East. The people are young, urbanising, and tech-savvy – and they are now entering peak home buying years.
Up until recently, mortgage durations in Turkey have typically been capped at 10 years. High interest rates restricted access to affordable home loans, taking Turkish homes off the market for the younger generation. In 2025, the government announced planned initiatives including mortgage terms up to 25 years. This makes home ownership viable for millions of professionals with monthly payments up to 40% lower and spread longer.
In April 2025, the Ministry of Treasury and Finance announced plans for a home ownership program across Turkey. This new program is focused towards buyers under the age of 35 and includes subsidised interest rates, down payment support, and reduced stamp duty for qualifying properties.
Construction and Development to Boom
With local demand for properties increasing and financing more accessible, the construction sector is set for a boom in 2025. According to the Turkish Contractors Association (TMB), over 350 residential and mixed-use projects are at pre-launch phase. From Q3 2025, a wave of new builds in Istanbul, Ankara, and coastal resort cities are expected.
Turkey’s growing middle class is seeking better lifestyles. Gated communities, homes with smart technology, and eco-friendly design is in high demand. New development in strategic parts of Basaksehir in Istanbul, Konyaalti in Antalya, and Bornova in Izmir are being master planned to meet this demand.
Rental Yields and Buy-to-Let Opportunities
Falling interest rates and increased buyer demand are set to raise prices of Turkish real estate. Alongside this, rental demand is also growing rapidly. In Turkey’s largest city, Istanbul, 250,000 international students and 150,000 digital nomads and remote workers create a pool of potential renters for investors to pick from.
Economic and demographic signals are all pointing in the same direction: up. Rate cuts are coming, lending and mortgage terms are improving, construction is starting up again, and early foreign buyers are returning. Domestic demand, stopped due to monetary tightening, is about to be released and is set to explode.
For strategic investors, the time to act is now. The pre-boom phase is a small window that offers better prices, more incentives from developers, and a greater availability to pick and choose from the best properties. By 2026, competition will return, and the top opportunities will be harder to come by. Whether you’re a first-time international buyer or a seasoned investor looking to expand your portfolio, the 2025 to 2026 window could represent the most profitable Turkish property cycle since the early 2010s.
To learn more about the best options currently available, and how to successfully navigate this momentous market shift, contact our expert team at Property Turkey. We are happy to answer all of your questions.
"We’re standing at the edge of a real estate explosion. Once the Central Bank begins cutting rates, and it will, this market will move fast. Prices will double again in key areas over the next few years. If you’re thinking long-term, the time to act is now."
Fethiye 
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