Turkey’s Property Market Breaks Records in 2025 — What Buyers and Investors Must Watch

Record sales in a high-rate environment: what happened in 2025

The Turkey real estate market closed 2025 with a surprise: house sales reached a new high of 1.68 million units, up 14.3% from 2024. That headline figure came after a strong December, when 254,777 homes changed hands, a 19.8% year-on-year jump, according to data from the Turkish Statistical Institute (TurkStat). For buyers and investors watching housing prices and transaction volumes, these numbers raise immediate questions: how can sales surge while borrowing costs remain high, and what does this mean for real values and returns?

I will walk through the data released by TurkStat and the Central Bank of the Republic of Türkiye (CBRT), explain what drove the activity last year, and give practical guidance for people considering property purchases or allocations to Turkish real estate.

How the market found demand despite tight monetary policy

Policymakers raised the policy rate sharply from mid-2023 and kept it elevated into 2025 to tame inflation. The CBRT’s benchmark policy rate stood at 38% in December, after a gradual easing cycle from earlier highs. Inflation peaked at about 75% in mid-2024 and slowed to below 31% in December 2025, the lowest since November 2021. Even with these high nominal interest rates, the housing market showed resilience.

Key drivers of demand in 2025 included:

• A rebound in mortgage activity: mortgaged sales for the year rose to 236,668 units, a 49.3% increase versus 2024, after mortgage-originated sales accelerated in the latter half of the year.
• Seasonal and pandemic-era comparisons: the previous peak of 1.5 million sales in 2020 was driven by aggressive mortgage campaigns during COVID-19; 2025’s peak reflects different dynamics but similar transaction momentum.
• Local appetite for housing and household formation in urban centres, particularly in major provinces.

From an investor perspective, this pattern suggests demand can be sustained when mortgage channels reopen and when buyers judge inflation and incomes in ways that make housing purchases attractive despite high headline rates.

Where sales were concentrated: regional leaders and implications

Geography matters in Turkey’s housing market. TurkStat’s county-level breakdown shows the largest volumes in the usual metropolitan hubs:

• Istanbul: 280,262 units (highest)
• Ankara: 152,534 units
• Izmir: 96,998 units

These three provinces alone accounted for a substantial share of national transactions. For buyers and investors this means:

• Liquidity is highest in large cities, which helps exit strategies for rental or resale plays.
• Price dynamics can diverge: large urban markets often attract both local and foreign demand, while smaller provinces may move slower.
• New housing supply and projects remain concentrated in metropolitan areas, influencing rental yields and capital appreciation prospects.

If your strategy depends on resale speed or short-term cash flow, prioritise supply-constrained neighbourhoods within these cities rather than secondary provinces.

Mortgage market: recovery, risks and what the numbers mean

Mortgage-originated sales accelerated in 2025. December saw 29,149 mortgaged transactions, up 25.2% year-on-year for the month, contributing to the full-year total of 236,668 mortgage sales.

Interpretation for buyers and investors:

• The rebound in mortgage demand shows households responded to relative improvements in inflation and some easing expectations from the central bank.
• High nominal policy rates kept monthly financing costs elevated, so buyers who used mortgages in 2025 were either locking in financing for longer horizons or benefitting from specific lender promotions.
• A larger share of purchases financed by mortgages increases market sensitivity to policy moves: future rate cuts would likely accelerate demand further, while any renewed tightening would cool activity.

From a technical standpoint, watch mortgage-to-sales ratios, loan-to-value (LTV) limitations, and the average mortgage tenor available in the market. Those factors determine affordability more than the headline policy rate alone.

Prices: nominal gains but second straight year of real declines

This is where the nuance matters. The CBRT’s Residential Property Price Index (RPPI), which is quality-adjusted, showed mixed signals:

• Nominal RPPI rose by 29% year-on-year in 2025.
• After adjusting for inflation, the RPPI recorded a 1.4% decline in real terms for 2025.
• That follows a 10.4% real decline in 2024, meaning this is the second consecutive year of falling real housing prices.

Put simply, asking prices and transaction prices increased in nominal Turkish lira, but inflation outpaced those gains enough that the purchasing power-adjusted value fell.

What this means for buyers and investors:

• If you measure returns in local currency without accounting for inflation, the story looks positive. If you measure in real terms or in a foreign currency that has been more stable, gains look weaker.
• For income investors relying on rental yields, real declines in prices can improve yields if rents keep pace with inflation or if rental contracts are in foreign currency; but if rents lag, yields will not compensate for inflation.
• For capital appreciation plays, the path to real gains depends on disinflation continuing and nominal prices growing faster than overall inflation.

I think the RPPI data should temper enthusiasm: the market is active, but the underlying real value of housing has not yet recovered from the previous downturn.

Foreign buyers: December uptick but annual decline

Foreign demand is an important part of the Turkish real estate story, and the picture in 2025 is mixed. TurkStat reported:

• December foreign buyer sales rose 5.1% year-on-year to 2,541 units.
• For the full year, sales to foreigners fell by 9.4% to 21,534 units.

By nationality, Russians remained the largest foreign buyer group:

• Russians: 504 units in December; 3,649 units in 2025 (annual)
• Iranians: 232 in December; 1,878 annual
• Ukrainians: 193 in December; 1,541 annual

Takeaways for investors:

• The December uptick suggests some seasonal recovery in foreign demand, but the full-year decline indicates structural headwinds: currency volatility, visa and travel considerations, and higher financing costs for foreign purchasers.
• Projects targeting foreign buyers should consider pricing flexibility and residency/citizenship policies. Turkey has historically attracted buyers seeking second homes, investment properties, and residency-linked transactions.
• Cities with strong foreign demand — coastal provinces and Istanbul — remain the best places for foreign-focused developments.

Risks and headwinds investors must weigh

The headline numbers do not eliminate risk. Key downside factors include:

• Real price declines in consecutive years: the RPPI shows a 1.4% real drop in 2025 and a 10.4% drop in 2024, so cumulative erosion of real value is significant.
• Inflation remains elevated despite cooling: below 31% in December is progress, but still high relative to many peers and a drag on purchasing power.
• High policy rate legacy: although the CBRT has started easing, the 38% policy rate in December kept financing costly for much of the year.
• Dependence on policy: a sustained pickup in mortgage demand will depend on more easing or significant lender concessions; a reversal would cool the market quickly.

As a practical matter, investors should stress-test scenarios: what happens to rental income if inflation remains above wage growth?