Despite high borrowing costs, the residential market remains a primary investment vehicle, bolstered by strong domestic demand and equity-rich buyers.
Türkiye’s residential real estate market continues to prove its extraordinary resilience in the face of significant global and domestic economic tightening. While central banks worldwide struggled with inflation, the Turkish housing market demonstrated a robust “rebound” effect. By the end of 2024, total housing transactions reached 1.3 million units, representing a 10.2% annual increase. This recovery is particularly notable given the backdrop of high borrowing costs; while traditional mortgage-backed sales were limited, the market’s pulse remained strong due to cash transactions, bartering systems, and alternative developer-led financing models.
Istanbul remains the undisputed epicenter of this residential boom, accounting for 16.5% of all sales nationwide. However, the data reveals a healthy diversification, with Ankara and İzmir following closely. A significant trend emerged in late 2025: a decisive shift toward new construction projects, which accounted for 32.4% of total sales. This is driven by a profound change in buyer psychology, where consumers are increasingly prioritizing earthquake-resilient, energy-efficient, and “smart” homes following the implementation of stricter building codes and the national urban transformation initiative.
Real estate remains the preferred “safe haven” for domestic investors seeking to preserve capital against currency fluctuations. Unlike other asset classes, property in Türkiye has historically provided a double hedge: capital appreciation and rental yield. Furthermore, the housing supply shortage remains persistent in major urban centers due to rising land costs and urbanization rates. This supply-demand imbalance ensures that prices have a solid floor, even during periods of high interest rates.
Looking toward the mid-term of 2026, the outlook for the residential sector remains decidedly positive. Analysts predict that as inflation stabilizes and the potential for interest rate cuts appears on the horizon, a massive “pent-up demand” from the middle class will be unleashed. For international sourcing and business professionals, this residential stability is crucial; it ensures a steady labor pool and a functional urban environment for expatriate staff. The ongoing “Urban Transformation Law” is also creating massive opportunities for international construction firms and material suppliers as Türkiye aims to renovate millions of housing units over the next decade.
Citations & Sources:
- Transaction Data: TURKSTAT (TÜİK) – House Sales Statistics December 2024/2025
- Real Estate Council: GYODER – Indicators of Turkish Real Estate Sector Report
- Market Outlook: REIDIN – Türkiye Residential Property Price Index
