Why are Property Prices Increasing in Turkey?

The Turkish real estate market has seen double-digit annual gains over the past five years in both TRY and USD terms. While this growth seems attractive to investors, understanding the underlying dynamics is key to making the right decision.

1. Population & Urbanization

Turkey's population has grown from 67 million to 85 million in the past 20 years. Meanwhile, 93% of the population lives in cities. Istanbul alone, with over 16 million people, is Europe's largest city. Urbanization pressure constantly creates new housing demand, especially in major city centers.

2. Urban Renewal

The urban renewal policy launched after the 1999 Marmara earthquake is replacing old building stock with new. In Istanbul alone, more than 6 million buildings are subject to renewal. This both keeps construction active and lifts per-square-meter prices in new builds.

3. Foreign Investor Demand

The Turkish citizenship program launched in 2017, with the threshold lowered to $400,000, has driven foreign demand sharply higher. Annual sales to foreigners exceed 50,000 units, with buyers from Russia, UAE, Saudi Arabia, Iran, Germany and the UK. Foreign demand particularly pushes up prices in branded projects.

4. Inflation and Real Returns

While annual inflation in Turkey runs high, housing appreciates in TRY terms. Even in USD terms, real growth of 30–40% has been seen in major cities over five years. This shows real estate as both inflation hedge and a foreign-currency yielding asset.

5. Limited Supply, Strong Demand

Rapidly rising construction costs (steel, cement, labor) make developers hesitant to start new projects. Supply bottlenecks lift the value of existing stock. Central-location zoning restrictions amplify the effect.

6. Mega Infrastructure Projects

Istanbul Canal, the third bridge, new airports, high-speed rail — major infrastructure investments rapidly raise nearby property values. Halkali, Başakşehir and Arnavutköy are among the clearest beneficiaries.

7. Low Interest Rate Policies

Relatively low housing loan rates also support domestic demand. Rental incomes continue rising within inflation limits, providing investors a passive yield.

2026 Outlook

Given the continuation of mega projects, the attractiveness of the citizenship program and ongoing urbanization, medium-term gains (TRY 25–35%, USD 5–10% per year) are expected to continue. Choosing the right region and project type can deliver returns well above average.

Talk to our expert team about which region and project type fits your investment goals.