Rising house prices in Turkey

According to the Central Bank of Turkey (CBRT), in October 2023, the residential real estate price index (RPPI) increased by 2,1 % compared to the previous month, reaching 151,1 on the base scale of 2023=100. The annual nominal growth was 26,8 %, but the real value decreased by 14,7 % after adjusting for inflation.

The RPPI index, which measures changes in housing prices based on quality, shows significant differences in regional dynamics.

Regional differences and dynamics in large cities

The growth rates of real estate prices vary depending on the region of Turkey. In October:

• in Istanbul, prices increased by only 1,1 % per month, and the annual growth was 21,2 %; 
• in Ankara, the monthly increase was 2,8 %, and the annual increase was 32,5 %; 
• Izmir showed the highest growth rates: 4,5 % per month and 28,7 % year-on-year. 

These data indicate the greatest consumer interest and activity in the markets of Ankara and Izmir.

Housing sales trends and their relationship to prices

Against the background of a decrease in the real cost of housing, the market reacts with increased sales. According to the Turkish Statistical Institute (TurkStat):

• In October, home sales increased by 2,8 % month-on-month.
• From January to October, transactions showed an increase of 11,9 % year-on-year, reaching a volume of 1,11 million units. 
• Purchases on the secondary market increased by 97,3 %, accounting for 34,9 % of the total, which indicates a higher demand for ready-made housing.
• During the year, sales of new real estate increased by 20,4 %, reaching the figure of 358,558 units.

Reasons and analytics

Experts attribute such contradictory trends to the impact of inflation and a deterioration in the purchasing power of the population. Despite the growth of the nominal RPPI index, the real decline in prices is dictated by the pressure of inflation, which makes the purchase of real estate more affordable for part of the population.

In addition, the growing demand in Ankara and Izmir can be explained by internal migration of the population, who are looking for more affordable housing compared to Istanbul, where price growth is slowing down. 

A comparison with the past shows that during the years of high inflation (for example, in 2001 or 2018), the Turkish real estate market showed similar patterns in the form of an increase in demand for the secondary market and a slowdown in large metropolitan areas.

Forecasts for the future

While maintaining the rate of inflation and reducing the real value, experts expect further sales growth, especially in the secondary market. However, further changes will depend on political and economic decisions affecting credit accessibility for citizens. If the inflation rate stabilizes, real estate prices may start to rise again in both nominal and real terms.

Thus, despite the inflationary challenges, the Turkish housing market continues to show high activity, which underlines the continued investment attractiveness of the sector.

Despite high inflation fluctuations, high demand for housing continues to persist in large cities. This is partly due to the launch of the digital Nomad Visa program. Freelancers and remote employees began to consider Turkey as a possible place to work and live. If you are thinking about living in this country, then find out more about the possibilities of a digital nomad visa in Turkey. We have prepared detailed material that will be able to reveal all the prospects of the program and suggest the best option for obtaining this residence permit.