Houses are most expensive in Ankara, Izmir and Istanbul

In the first quarter of 2023, Ankara, Izmir and Istanbul were the fastest growing house prices among 150 cities in the world.

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Turkey saw the largest increase in house prices among 56 countries in the world. In the first quarter of 2023, house prices in Turkey increased by 133% compared to the same period in 2022. In contrast, house prices have fallen in some countries, including Germany and the UK.

While the crisis in Turkey's real estate and rental market continues to intensify, the government is taking new measures to alleviate the problem. At a time when official inflation exceeds 70%, the government has capped rent increases at 25%, leading to conflict between owners and tenants. The Banking Regulatory and Supervisory Commission (BDDK) recently decided to reduce the credit score for mortgages by 75% if the borrower has a spouse or children under the age of 18. For example, when buying a house worth 5 million Turkish Liras, the borrower will be granted a loan of 22.5 percent of the value of the secondary home.

According to the Global House Price Index compiled by international consulting firm Knight Frank for 56 countries and regions, house prices in Turkey for the first quarter of 2023 increased by 132.8% compared to the same period in 2022. North Macedonia comes second (18.8%), followed by Croatia (17.3%), Hungary (16.6%) and Lithuania (15.3%). In some other countries, price increases amounted to the following: Greece 14.5%, Bulgaria 9.5%, Japan 6.8%, France 2.7% and the US 0.7%.

Home prices declined in some regions of Europe, mainly in Germany (1%) and the UK (3.1%), as well as in Sweden (8.8%). The index also analyzes price changes in 150 cities.

Significant price declines were seen in several cities, including Washington DC (-0.2%) and Rotterdam (-0.3%). These changes are nominal and do not account for inflation. The real change in house prices in Turkey is also very high. Real house prices in Turkey increased by 51% in the last quarter of 2021-2022.

According to the house price index published by the Central Bank of Turkey, house prices rose 189% year-on-year in September 2022, the highest in 10 years. House prices started to rise sharply from September 2021 when the new economic model was introduced. In September 2011, annual house price growth was 36%.

As inflation began to fall, annual growth was 96% in June 2023. At the same time, real home prices rose 38% during the period.