Why are Property Prices Increasing in Turkey?

The Turkish real estate market has seen double-digit annual gains over the past five years in both TRY and USD terms. While this growth seems attractive to investors, understanding the underlying dynamics is key to making the right decision.

1. Population & Urbanization

Turkey's population has grown from 67 million to 85 million in the past 20 years. Meanwhile, the vast majority of the population lives in cities. Istanbul alone, with over 16 million people, is Europe's largest city. Urbanization pressure constantly creates new housing demand, especially in major city centers.

2. Urban Renewal

The urban renewal policy launched after the 1999 Marmara earthquake is replacing old building stock with new. In Istanbul alone, more than 6 million buildings are subject to renewal. This both keeps construction active and lifts per-square-meter prices in new builds.

3. Foreign Investor Demand

The Turkish citizenship program launched in 2017, with the threshold lowered to $400,000, has driven foreign demand sharply higher. Annual sales to foreigners exceed 50,000 units, with buyers from Russia, UAE, Saudi Arabia, Iran, Germany and the UK. Foreign demand particularly pushes up prices in branded projects.

4. Inflation and Real Returns

While inflation in Turkey has been high, housing prices have risen in lira terms, and major cities have also seen real growth in USD terms in recent years. This is why many investors view real estate as both an inflation hedge and a foreign-currency asset.

5. Limited Supply, Strong Demand

Rapidly rising construction costs (steel, cement, labor) make developers hesitant to start new projects. Supply bottlenecks lift the value of existing stock. Central-location zoning restrictions amplify the effect.

6. Mega Infrastructure Projects

Istanbul Canal, the third bridge, new airports, high-speed rail — major infrastructure investments rapidly raise nearby property values. Halkali, Başakşehir and Arnavutköy are among the clearest beneficiaries.

7. Low Interest Rate Policies

Relatively low housing loan rates also support domestic demand. Rental incomes continue rising within inflation limits, providing investors a passive yield.

2026 Outlook

Given ongoing mega projects, the attractiveness of the citizenship programme and continued urbanisation, demand is expected to remain supportive in the medium term. Choosing the right region and project type is the key factor in long-term performance.

Talk to our expert team about which region and project type fits your investment goals.

Related: Turkey real estate market 2026: the latest official figures

Government policy also shapes the market; see how the Turkish government supports the real estate sector.

Related reading: how to compare property prices in Istanbul · why apartments in the same building have different prices

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