The property market in Turkey is at a fundamental crossroads. After years of very high inflation, the country’s new economic policy-marked by a cycle of sharp tightening in 2023-H1’24 and limited interest rate reductions in 2025-is beginning to show results. For investors, this signals the end of the era of easy nominal gains being eaten by inflation, and the beginning of a more mature market that demands careful analysis. In this complete analysis, we’ll cover everything from price stabilization to hidden costs, exit taxes, and our forecast for 2026.
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State of the Property Market in Turkey – Key Trends 2025
In 2025, the market is defined by one word: stabilization. Drastic interest rate hikes, with cautious reductions to 39.5% (CBRT, 23 Oct 2025), have cooled the domestic market.
Price Analysis: Nominal Growth vs. Real Value
The most important metric for understanding the property market in Turkey in 2025 is the difference between nominal and real growth.
- Nominal Growth (in lira): The Central Bank of Turkey’s (CBRT) Residential Property Price Index (RPPI) reported a nominal growth of +32.82% year-on-year (CBRT, July 2025).
- Real Growth (vs. inflation): This growth almost perfectly matches the official annual inflation (CPI), which, according to TÜİK (Turkish Statistical Institute), was 32.87% (TÜİK, Oct 2025).
In hard-currency terms, the market is essentially flat. Prices in US dollars (USD) have stabilized, with the national average around $1,025/m² (Q2 2025) and Istanbul at $1,630/m² (Q2 2025).
Demand and Supply Drivers
- Foreign Demand: The “Citizenship by Investment” (CBI) program maintains interest, but sales to foreigners accounted for only 1.2%-1.4% (TÜİK, 2025) of all transactions.
- Local Demand: This segment is severely hampered. With mortgage rates in the high 30s to low 40s percent range in 2025, purchasing a home with credit is nearly impossible for many locals.
- The Supply Side: On the supply side, high rates and elevated input costs curtailed new starts. In Q1 2025, both construction and occupancy permits (by floor area, y/y decline in Q1’25) declined, tightening future supply-especially in prime city centers.
Rental Market and Yield
The rental market remains strong. It is crucial to distinguish between gross and net yield (which is calculated after licensing, taxes, and vacancy).
- Gross Yield: In Istanbul, this ranges between 4.5%-6% depending on the district, while the national average is around 7.41%-7.76% (Q1’25, method-dependent).
- Net Yield: Always lower after deducting expenses (maintenance fees, taxes, vacancy periods).
Before investing, it is critical to understand how to calculate Gross Rental Yield. Short-term rentals (stays ≤ 100 days) require permits; model net yield after licensing, taxes, and vacancy.
Investment Hotspots: Where to Invest in Turkey?
Regional differences are vast. The table summarizes the key markets, with details following below.
| City | Avg. Price (USD/m²) | Gross Yield (Approx.) | Key Risk/Note |
| Istanbul | ~$1,630 (Q2 2025) | 4.5%-6.0% | Stable; lower yield. |
| Bodrum | ~$2,825 (Oct 2025) | 5%-8%+ (Seasonal) | Luxury segment; tourism-dependent. |
| Antalya | ~$1,200 (Q1 2025) | 6%-8%+ (Seasonal) | High seasonal potential; Airbnb regulations. |
| Ankara | ~$920 (Q1 2025) | 6%-7.5% | Stable domestic market; lower liquidity. |
| Izmir | ~$1,150 (Q1 2025) | 6%-7.5% | Growing; “lifestyle” market. |
Istanbul (The Economic Hub)
- Why: A global megacity, the country’s economic heart. It attracts both business and real estate investment in Turkey through the CBI program.
- Prices (Q2 2025): Average prices around $1,630/m² citywide, but premium districts easily exceed $3,000-5,000/m².
- Yield: A gross yield of 4.5%-6%. Yields are lower but more secure due to steady long-term rental demand.
- Risk/Advantage: Stable, liquid market with lower risk but more limited explosive growth potential.
Antalya and the Aegean Coast (The Tourism Hubs)
- Why: The focus of international tourism. Areas like Muğla (including Bodrum) are in the luxury segment.
- Prices: Antalya is more accessible (average $1,200/m² as of Q1 2025). Muğla (average $1,810/m² as of Oct 2025) and especially Bodrum (average $2,825/m² as of Oct 2025) are significantly more expensive.
- Yield: High potential from short-term (Airbnb) rentals, but highly seasonal and subject to new regulations.
- Risk/Advantage: Direct dependence on tourism and geopolitics.
Ankara and Izmir (The Stable Local Markets)
- Why: Ankara, the orderly, green capital, is driven by public administration and students. Izmir, a liberal Aegean lifestyle hub, is a thriving coastal city.
- Prices (Q1 2025): Lower entry barrier. Ankara (average $920/m²) and Izmir (average $1,150/m²).
- Yield: Focus on long-term rentals for the local population (6%-7.5%).
- Risk/Advantage: Less dependent on foreign buyers, making them less volatile but also offering lower international liquidity.
Key Considerations for Foreign Investors
The “Citizenship by Investment” (CBI) Program
This remains a primary stimulus for real estate investment in Turkey.
- Investment Threshold: A real estate purchase of at least $400,000 (single or multiple properties).
- Key Requirements: The property must be held for at least three years. An SPK (Capital Markets Board) valuation is required. For sales with a foreign buyer, banks must convert the price into TRY and issue a DAB (Document of Foreign Exchange Purchase); the deed amount and DAB value must match. A three-year annotation (title deed restriction) is also required.
- Comparison: The program is attractive. See how it stacks up against the complete guide to the UAE residency visa.
Taxes and Purchase Costs (and Ownership)
- Title Deed (TAPU) Fee: A total of 4% of the declared property value (often split 2%/2%).
- Annual Property Tax: Very low, 0.1%-0.6% (doubled rates in metropolitan cities).
- VAT (KDV): A VAT exemption (Art. 13/1-i) applies to the ‘first delivery’ (new-builds) to non-residents under certain conditions.
Hidden Costs & Notes:
- Aidat (Maintenance Fees): This is a critical ongoing cost. For modern complexes with pools, the monthly Aidat can be substantial.
- Valuation (Ekspertiz) Fees: These rose in 2025, typically costing ₺11,000-₺13,500+.
- Disclaimer: Fees and taxes vary by municipality; always confirm current rates.
Capital Gains Tax (CGT) upon Exit
This is the key to your exit strategy:
- If sold within five years, gains are taxed at progressive rates (≈15%-40%) with the basis indexed to PPI (Yİ-ÜFE).
- After five years of ownership, sales by individuals are exempt from this tax.
Financing for Foreigners
Mortgages for non-residents exist but are costly and selective: typical LTV (Loan-to-Value) is ≈50%-70% depending on bank and profile; loans are generally in TRY (Turkish lira), as FX-indexed lending to individuals has been restricted since 2018. In practice, this is largely a cash-buyer’s market.
Short-term Rental (Airbnb) Regulations
As of January 1, 2024, Law No. 7464 came into effect, strictly regulating short-term rentals (stays ≤ 100 days). A special permit (license) is required, and fines for non-compliance are significant.
The Purchase Process (Briefly)
The process is fast but requires attention:
- TAPU (Title Deed): This is the key element.
- Iskan / Kat Mülkiyeti: A critical check! Verify that the unit has Kat Mülkiyeti (the final title deed, which is post-İskan). Units lacking İskan (occupancy permit) may face utility and mortgage hurdles and resale discounts.
- Lawyer: Hiring an independent lawyer is not legally mandatory, but it is strongly recommended.
For full details, see our guide on how to buy property in Turkey.
Risks and Forecast for 2026
What are the risks?
- Currency Volatility: The single biggest risk. It stems from the country’s recent “unorthodox” monetary policy.
- Inflation: While slowing, it still eats into real rental yields paid in lira.
- Regulatory Risk: The new Airbnb law is a perfect example.
- Political Uncertainty: Domestic and regional geopolitics are always a factor.
Expert Forecast for 2026
We are cautiously optimistic. The new economic orthodoxy appears to be working. The Organisation for Economic Co-operation and Development (OECD) (Economic Survey, 2025) forecasts that the Turkish economy will return to sustainable growth (GDP 3.9% for 2026), with inflation expected to fall to 17%.
For the property market in Turkey, this means:
We expect the market to stabilize in real (hard-currency) terms. Opportunities lie less in speculative growth and more in long-term ownership of quality assets (given the 5-year CGT rule). We predict a return to moderate but sustainable real price growth (2-4% above inflation) toward the end of 2026.
Conclusion
Investing in Turkey in 2025/2026 is no longer a gamble based on high inflation, but a strategic decision. The market has cooled and is maturing. The risks are real, but the economic fundamentals are showing signs of recovery. For the intelligent investor, the property market in Turkey is transitioning from a “speculative” to a “strategic” investment.
Before making a decision, it is crucial to calculate your potential return. Learn how in our complete guide to calculating Gross Rental Yield.
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This post is also available in: Български
