Overview of the Turkish Real Estate Market – October 2025

The Turkish real estate market in October 2025 presents a complex yet dynamic picture. Amid ongoing efforts to curb inflation and a significant rise in mortgage sales, the real value of housing continues to decline. This article, based on the latest data from the Turkish Statistical Institute (TÜİK) and the Central Bank of the Republic of Türkiye (TCMB), provides an in-depth analysis of current trends, the macroeconomic background, and 2026 forecasts for investors and homebuyers.

Macroeconomic Background and Its Impact on the Real Estate Market

Türkiye’s macroeconomic policies aimed at reducing inflation are directly influencing the property market. Key factors such as construction costs and credit interest rates shape the current market dynamics.

Inflation, Loan Rates, and Construction Costs

According to TÜİK, the Construction Cost Index (İnşaat Maliyet Endeksi) rose by 22.82% year-on-year in August 2025 [1]. Labor costs increased by 30.16%, outpacing the 19.17% rise in material costs — indicating mounting pressure on developers due to workforce expenses.

Rental Regulation

On July 1, 2024, the 25% legal cap on rent increases for residential properties was lifted. As of October 2025, the new maximum legal rent increase stands at 38.36%, based on the 12-month average Consumer Price Index (TÜFE) [2]. This change is expected to make rental property investments more attractive.

Overall Market Statistics and Trends in 2025

Housing Sales and Mortgages

In September 2025, 150,657 residential properties were sold across Türkiye — a 6.9% increase compared to the same month last year [3]. During the first nine months of 2025, total sales reached 1.13 million units, up by 19.2% year-on-year.

The strongest growth was recorded in the mortgage segment, up 34.4% year-on-year (21,266 transactions), suggesting that buyers continue to use credit despite high interest rates, possibly due to inflation expectations.

Housing Price Index (KFE)

According to the Central Bank of Türkiye, the Housing Price Index (KFE) increased by 32.2% year-on-year in September 2025 [4]. However, due to high inflation, the real value of housing continues to decline for the 20th consecutive month — meaning prices rise in lira terms but lose purchasing power.

Regional Differences

İzmir and Ankara show higher monthly price increases (2.9% and 2.3%) than İstanbul (1.5%), indicating a demand shift toward less saturated metropolitan areas.

Foreign Buyer Activity

Sales to foreigners continue to decline. In September 2025, 1,867 properties were sold to foreign buyers — down 7.7% year-on-year [3]. Between January and September, the decline reached 12.6%, with foreign sales accounting for only 1.2% of total transactions.

Property Segments: Residential and Commercial

Residential: Primary vs. Secondary Market

In September 2025, the secondary housing market dominated, accounting for 68.7% of all sales (103,540 units), up 7.8% year-on-year [3]. The primary market (new builds) represented 31.3% (47,117 units), with a 5.0% increase. This highlights strong demand for ready-to-use properties — assets that can immediately generate rental income or serve as inflation protection.

Commercial Real Estate

According to TCMB data, the Commercial Property Price Index (TGFE) rose by 31.9% nominally in Q2 2025, but fell 3.1% in real terms [5]. İzmir (+38.6%) and Ankara (+35.6%) outperformed İstanbul (+25.9%).

Growth Drivers and Risks

Growth Factors

• Urbanization and migration to large cities sustain housing demand.
• Real estate remains a key hedge against inflation.
• Mortgage sales continue to grow despite high interest rates.
• Government incentives and citizenship programs still support investment appetite.

Risks and Limitations

• Falling real housing values may weaken investor confidence.
• Exchange rate volatility creates uncertainty for foreign investors.
• High borrowing costs limit mass affordability, despite credit growth.

Forecasts and Scenarios for Late 2025 and 2026

Analysts agree that 2026 will mark a year of recovery, provided that current macroeconomic policies continue and inflation declines as expected.

• Rate cuts expected: Lower key rates in 2026 are likely to reduce mortgage costs and stimulate demand [6].
• Sales growth: Overall housing sales are projected to increase by 15–20%, and commercial real estate by 10–15% [7].
• Real price growth: As inflation slows, nominal housing prices are expected to rise faster than inflation for the first time in two years.

Cities such as Ankara, İzmir, and Antalya — with strong domestic demand and developing infrastructure — are expected to lead the market growth.

Practical Tips for Investors and Buyers

1. Focus on real price trends (KFE) rather than nominal growth.
2. Prioritize the secondary market (68.7% of all sales) for higher liquidity and faster returns.
3. Use mortgages strategically as a hedge against inflation.
4. Consider Ankara and İzmir for faster-growing markets.
5. Check rental yield: with rent caps removed, returns up to 38.36% (October 2025) are possible.

Conclusion

The Turkish real estate market in October 2025 stands at a turning point. Strong mortgage activity and sustained sales support the sector’s resilience, but declining real prices and weakening foreign demand call for a cautious approach.

• Resilient market: Sales volumes remain strong, especially in secondary housing.
• Real value down: Nominal price growth (32.2%) still lags behind inflation.
• 2026 outlook: Expected recovery with positive real price growth driven by rate cuts.

Frequently Asked Questions (FAQ)

1. What is the rental yield in Türkiye as of October 2025?

The maximum legal rent increase for October 2025 is 38.36% (based on 12-month CPI average). Actual yields vary by city, property type, and purchase price.

2. What is the average price per m² in İstanbul?

While TÜİK does not publish monthly m² averages, KFE data show a 1.5% monthly price increase in September 2025. Updated averages are available from private analytics platforms.

3. Can foreigners buy property with a mortgage in Türkiye?

Yes. Mortgage sales are growing rapidly — in September 2025, they accounted for 14.1% of all transactions, up 34.4% year-on-year.

Sources and References

1. TÜİK – Construction Cost Index, August 2025
2. Hesapkurdu – Rent Increase Calculator (October 2025)
3. TÜİK – Housing Sales Statistics, September 2025
4. TCMB – Housing Price Index (KFE), September 2025
5. TCMB – Commercial Property Price Index (TGFE), Q2 2025
6. Modernada – Housing Loan & Interest Rate Forecast 2026
7. Gökhan Aydınlı – Türkiye Real Estate Market 2026: Growth & Transformation