Why Turkish Households Are Choosing Property Over Gold — What Buyers Should Know

• Demand and price growth are usually strongest in major urban centres such as Istanbul, Ankara and Izmir.
• Secondary cities and rural land behave differently; land can be seen as a store of value but carries planning and liquidity risk.

We recommend local market research and comparable sales analysis before committing capital.

Risks and constraints buyers should weigh

Real estate is attractive in times of inflation, but there are several clear risks buyers must consider.

• Real return shortfall: With inflation expectations above housing price expectations, owners may see negative real returns unless rental yields offset the gap.
• Transaction and ownership costs: Taxes, title-deed fees (tapu), notary and agent commissions reduce net returns.
• Energy and food inflation: As the CBRT survey identifies, rising costs of living can place pressure on disposable income and rental affordability, which affects tenants and yields.
• Policy risk: Monetary and fiscal policy responses to inflation can affect interest rates and house-price momentum.
• Liquidity risk: Property is not a quick convert to cash; distress selling can crystallise losses.

We advise stress-testing every investment for these factors and planning exit strategies in advance.

How investors should approach sourcing and structuring deals now

For those considering property in Turkey as an inflation hedge or investment, practical steps include:

• Get a local valuation and a rent-roll analysis if you plan buy-to-let.
• Run sensitivity analyses for inflation, interest rates and exchange rates — include the CBRT’s TL 52.12 USD projection for FX stress testing.
• Consider holding periods: property tends to reward those who can commit capital for medium-term horizons.
• Factor in transaction costs and tax on capital gains when calculating net returns.
• Engage local legal counsel for title checks and to confirm any restrictions on foreign ownership.

These steps are standard in any cross-border purchase, but they are especially important in an environment of elevated inflation expectations.

What the shift means for the wider housing market and developers

A sustained rise in household demand for property influences the market beyond individual purchases.

• Increased household demand can support higher home prices in some segments, especially entry-level housing and small apartments that households targeting savings typically buy.
• Developers may re-price projects or reconfigure product mixes to match demand for smaller units or mixed-use properties combining residential and commercial elements.
• Financing conditions for developers could tighten or loosen depending on monetary policy responses and credit availability.

One thing we watch closely is whether the migration of savings into property raises affordability pressure for first-time buyers who rely on wages rather than accumulated savings.

Policy and macroeconomic context

The CBRT data shows a wide gulf between household inflation expectations and the official inflation rate path that monetary authorities might aim for. With headline inflation at 30.87% last month and household expectations at 51.56%, trust in price stability is low.

Policy tools available to restore confidence include tighter monetary policy and fiscal measures to reduce supply-side pressures, but their effectiveness can be limited while energy prices are under external pressure due to regional conflict. In the report, respondents flagged food and energy as the categories with the steepest recent increases — and the Iran war is cited as a factor driving energy costs up.

For property markets, macro policy affects mortgage rates, credit availability and the exchange rate — all of which feed into housing demand and prices.

Practical checklist for buyers right now

If you are evaluating property in Turkey given this CBRT data, use this checklist:

• Verify local market comparables and transaction timetables.
• Calculate real return: expected nominal price change minus expected inflation, plus rental yield.
• Include all acquisition and disposal costs in your modelling.
• Stress-test the purchase under TL depreciation scenarios (use the survey’s TL 52.12 as a base case for FX stress testing).
• Confirm legal title and planning status with qualified counsel.
• Consider holding cash reserves to cover vacancy or maintenance if renting.

Frequently Asked Questions

Is buying property in Turkey a good hedge against inflation?

Property can provide a partial hedge through nominal price appreciation and rental income, but the CBRT survey shows households expect inflation (51.56%) to outpace housing price rises (35.23%). That means real returns could be negative unless rental yields compensate. Buyers should model rental income and costs, not rely on capital gains alone.

Why are households buying less gold and more property?

The survey found the share wanting gold fell by 6.4 percentage points to 48.8%, while property interest rose 4.9 p.p. to 33.4%. Households may prefer property for perceived stability, rental income and tangible utility, and they may expect lower short-term returns from bullion. Still, gold remains the most chosen asset overall.

How should foreign buyers manage currency risk?

The CBRT survey projects USD/TRY at TL 52.12 over the next year. Foreign buyers should consider currency-hedged financing or price negotiations in foreign currency where legally allowed. Always run scenarios where the lira weakens further and assess debt servicing under those scenarios.

What are the short-term risks to property prices in Turkey?

Key near-term risks include continued high inflation that erodes real incomes, rising energy and food costs that strain households, potential policy shifts that raise interest rates and reduce mortgage demand, and liquidity constraints that make selling harder. All these factors can slow price growth or increase volatility.

Bottom line — a pragmatic appraisal

The CBRT survey documents a clear behavioral shift: more Turkish households say they would invest in property, while fewer choose gold, and inflation expectations are very high at 51.56%. For buyers and investors, that means opportunity but also risk. Real estate can be part of a strategy to preserve purchasing power, but the numbers show housing price expectations are below household inflation expectations, so rental income and careful deal structuring are essential. Our practical takeaway is simple: treat property as a long-term, illiquid asset that must be stress-tested against inflation, currency moves and rising living costs rather than as a guaranteed inflation victory.