Home Sales in Turkey Rise 6.9% in September 2025 — Why Buyers Are Brushing Off High Prices

Turkey’s real estate market keeps growing while macro indicators wobble

Turkey's real estate Turkey sector posted another puzzling month in September 2025: total home sales rose 6.9% year-on-year to 150,657 units, even as official inflation, record nominal prices and high borrowing costs persisted. This is not a small blip. The data point is part of a trend that has pushed cumulative sales in the first nine months of 2025 to 1.13 million units, up 19.2% year-on-year.

In this article we examine what is driving the surge, who is buying, what the risks are for investors and homebuyers, and how the coming months could reshape the market. Our analysis focuses on measurable data from İş Yatırım and Turkish press reports, combined with practical advice for anyone considering property investment in Turkey.

The numbers that matter: sales, mortgages and foreign demand

The headline figures for September 2025 are straightforward and hard to ignore:

• Total home sales: 150,657 units (+6.9% YoY, +5.1% MoM)
• Mortgage-backed sales: 21,266 units (+34.4% YoY, +7.9% MoM)
• First-hand sales: +5% YoY, +7.3% MoM
• Foreign buyer transactions in September: 1,867 units (-7.7% YoY; +3.1% MoM)
• Leading foreign buyer nationality in September: Russian nationals with 267 purchases

For the January–September 2025 period the scale of activity is even clearer:

• Total sales: 1.13 million units (+19.2% YoY)
• Mortgage-financed sales: +76% over the same period
• Foreign demand over nine months: down 12.6%

These figures show two simultaneous trends: stronger domestic demand and weaker international demand. Mortgage penetration is rising quickly, and that tells us something about buyer psychology and how households are financing purchases.

Why domestic buyers keep buying: inflation, rent pain and psychology

Two behavioural drivers explain much of the recent activity.

1. Real estate as an inflation hedge

Turkey's inflation dynamic is central to buyer behaviour. Official inflation sits at around 33%, but many households perceive inflation to be closer to 50%. That perception has real consequences. With the Turkish lira losing purchasing power rapidly, property has become a preferred way to preserve wealth. Put simply, people are converting cash into hard assets.

Compare asset returns this year in local terms:

• TL deposits delivered roughly 45%
• Gold returned around 80% in TL terms

Despite nominal home prices rising about 30% a year, in many regions inflation-adjusted or "real" prices have fallen. This creates a psychological effect: when everything else is getting more expensive faster than housing, buying a home feels like a comparatively safer store of value.

2. A rental market that has become unaffordable

Rents in Istanbul and other major cities have climbed at rates double or triple official inflation. For many middle-income households, renting has become an inefficient allocation of income. In many cases monthly mortgage obligations are now comparable to or lower than prevailing rents, even with high nominal mortgage rates. This has caused a behavioural shift: buyers are willing to accept high borrowing costs because rent feels like a permanent expense with no asset accumulation.

The quick rise in mortgage-backed transactions, up 34.4% YoY in September and 76% over nine months, confirms that many buyers are moving from renting to buying or refinancing into property.

Supply-side constraints, demographics and structural demand

Short-term psychology explains part of the surge, but longer-term structural factors matter too.

• Turkey's median age is 33, which supports sustained household formation and housing demand.
• Urban migration and concentration into metropolitan regions keep pressure on city housing stock.
• Construction activity is recovering but still lags behind replacement needs and population growth.
• Rising land and input costs constrain new supply, especially in major cities where infrastructure and zoning increase delivery times and costs.

In short, a structural housing deficit combines with strong demographic demand. That does not mean prices must keep rising indefinitely, but it does explain why a decline in affordability has not yet triggered a collapse in transaction volumes.

Policy contradictions and what they mean for real estate prices

There is a political economy angle that investors cannot ignore. The Central Bank of the Republic of Turkey (CBRT) has signalled monetary tightening or rebalancing at various points, while policymakers also rely on strong domestic demand to carry parts of the economy. Yet the surge in housing transactions tells a different story about domestic consumption and confidence.

Two policy-driven dynamics will shape prices in the months ahead:

• Publicly financed supply. Reconstruction after last year’s earthquakes and a presidential pledge to build 500,000 subsidized homes in 2026 could materially increase supply. Media reports estimate financing needs at about $20 billion. If those units reach the market quickly and target low-income demand, they will relieve price pressure in specific segments.

• Interest-rate policy. Market participants expect the CBRT to cut interest rates by a cumulative 300 basis points across upcoming meetings in October and December. A material reduction in the policy rate would lower mortgage costs and encourage refinancing and new borrowing, which could lift demand again before any added supply eases pressure.

These two forces are in tension. A large, rapid injection of subsidized housing aimed at rental markets would reduce scarcity in the lower priced segments. At the same time, lower rates would stimulate demand across the board, possibly triggering speculative activity or a short-term spike in transactions.

Foreign buyers: quieter but still present

Foreign purchases slowed in September, down 7.7% YoY to 1,867 units, and are down 12.6% over the first nine months. Russian citizens led the cohort in September with 267 transactions, followed by buyers from Iraq and Iran.

Why the slowdown? Several factors are at play:

• Currency and geopolitical risks weigh on some international buyers.
• Higher nominal prices reduce the cross-border arbitrage that once attracted retirees or second-home buyers.
• Visa, tax and regulatory changes, as well as shifting demand from traditional buyer nationalities, alter the composition of foreign demand.

For investors, the key takeaway is that the domestic market currently dominates price dynamics. Foreign buyers matter most in coastal and resort markets where dollar- or euro-denominated demand can lift luxury segments.

Risks for buyers and investors: what can go wrong

The market is resilient but not immune to material risks. We identify the following:

• Policy missteps.