Why rents in Turkey exploded 77.6% in a year — what property investors must know

Turkey’s rental shock: an investor’s reality check

Finding affordable housing is getting harder across Europe and nowhere is that more obvious than in Turkey. Our analysis of Eurostat and Knight Frank data shows real estate Turkey suffered one of the most extreme rent shocks in 2025, and the causes are both macroeconomic and regulatory. This article explains the figures, the drivers, the regional implications, and what buyers, landlords and international investors should do next.

The short version: rents across the EU rose by 3.1% in 2025, but Turkey recorded a staggering 77.6% annual increase in asking rents among 36 EFTA and EU candidate countries. That puts Turkey far ahead of the rest, with Montenegro the next highest at 18.5% and EU-leading Croatia at 17.6%.

How big is the rent problem across Europe?

The EU-wide picture matters because it highlights how exceptional Turkey is. Key figures from Eurostat and market researchers show:

• EU average rent growth in 2025: 3.1%
• Highest EU increases: Croatia 17.6%, Greece 10%, Hungary 9.8%, Bulgaria 9.6%, Romania 8.2%
• Low-growth EU markets: Finland 1%, Luxembourg 1.6%, Malta 1.7%, Slovenia 1.9%, Germany 2.1%, Denmark 2.2%, France 2.3%, Spain 2.4%
• Other notable rates above 5%: Czechia 6.1%, Latvia 5.7%, Lithuania 5.6%, Portugal 5.3%, Sweden 5.3%, Netherlands 5.1%, Slovakia 5.1%

These figures show eastern and some southern European markets are seeing much higher rental pressure than western core economies.

Why Turkey is an outlier: the mix of inflation, mortgages and policy

Turkey’s 77.6% increase cannot be explained by demographics or tourism alone. Three interconnected forces explain the jump.

1. Very high inflation and currency depreciation

Inflation in Turkey has been unusually high in recent years. As Kate Everett-Allen of Knight Frank told Euronews Business, “Inflation is exceptionally high in Turkey meaning inflation accounts for a large proportion of the headline nominal rental growth.” When consumer prices and the lira lose value quickly, landlords treat property as a hedge and push rents up to protect real income. That behavior feeds into headline numbers.

2. Homeownership becoming unaffordable

Rapid house price rises, high mortgage rates and a scarcity of long-term fixed-rate mortgages have locked many households out of the buyer market. The result: more households are forced into renting. As Knight Frank’s head of European residential research observed, higher mortgage rates are shifting potential buyers to tenants, boosting demand for rental units.

3. Rent controls with perverse effects

In July 2022 Turkey capped rent increases for existing tenancies at 25%, a cap that was extended through July 2024. This measure lowered legally permitted increases for sitting tenants well below inflation. The unintended outcome, as Everett-Allen notes, is that landlords seek to recover losses by charging much higher rents on new lets. That push on fresh contracts raises headline market rents and fuels volatility. Mikk Kalmet of Global Property Guide also commented that rent and prices move together when housing is used as a hedge against inflation.

Put together, these three factors explain why Turkey’s rent growth stands apart from other markets where either inflation is lower or regulatory levers differ.

What this means for buyers, landlords and investors in Turkey

The Turkey rental story has implications across the property cycle. We break them down by stakeholder.

For landlords and buy-to-let investors

• Higher headline rents can mean strong gross yields in local currency. But beware of real returns after inflation and taxes.
• Regulatory risk is real. Past rent caps show the state can intervene and that such measures can change market dynamics overnight.
• Currency volatility matters. If your financing or exit planning is in foreign currency, a depreciating lira wipes out gains.
• Retrofit and energy efficiency costs are rising across Europe and affect landlord operating expenses. Expect higher holding costs and factor them into yield calculations.

Practical considerations:

• Price assets using inflation-adjusted metrics where possible, or index rents to a credible inflation measure.
• Consider longer-term leases that include staged inflation-linked rent reviews.
• Build contingency for repair, retrofit and tax changes into cashflow models.

For homebuyers and tenants

• With mortgages expensive and scarce, renting is the de facto option for more households.
• Tenants face less protection in markets with rapid nominal rent inflation because new contracts reset to current market conditions.
• The rise in minimum wage in Turkey by 27% in 2026 while almost two in five workers are on minimum wage adds complexity: wage growth may not keep pace with real living costs and rents in many urban centres.

For international investors

• The headline rent surge looks attractive but carries currency and political risk.
• Short‑term holiday rentals in attractive coastal regions can produce strong income streams, though supply management and rule changes can change returns quickly.
• Inbound demand from expatriates, tourists and corporate relocations supports some segments, notably Istanbul and coastal resorts, but rely on granular market research.

Regional dynamics inside Turkey: where demand is strongest

Not all Turkish cities are the same. The national average conceals regional differences that matter to investors.

• Istanbul remains the largest rental market driven by urban migration, jobs and international demand. Market segments range from premium central neighbourhoods to budget suburbs.
• Coastal provinces such as Antalya, Muğla (which includes Bodrum and Marmaris) and İzmir attract strong short-term and seasonal demand. That inflates both short-stay and long-stay rents during peak periods.
• University towns and industrial nodes show solid, more stable rental demand from students and workers.

For investors I recommend mapping rental demand by tenant profile rather than assuming a single national trend applies.