Turkey’s Housing Market Slows: New Data Shows Sharp Shift in Real Price Growth

The Central Bank of the Republic of Türkiye (TCMB) has released its October 2025 Housing Price Index (KFE), providing a detailed examination of the country’s evolving real estate dynamics. While headline numbers show continued price increases, the underlying data signals a noticeable slowdown in real terms, reflecting the impact of inflation, regional disparities, and shifting market behavior.

According to the newly published bulletin, the Housing Price Index rose by 1.6% month-on-month in October, maintaining a steady upward trend compared with September. Every year, nominal housing prices jumped 31.6%. Yet, when adjusted for inflation, the picture changes sharply: real housing prices fell by 1.0%, marking a significant decoupling between nominal appreciation and purchasing-power-adjusted value.

What the KFE Really Shows About the Market

The KFE, designed to measure housing price changes after removing quality effects, reached 198.8 points (2023=100) in October. This metric provides a clearer view of pure price movement, independent of housing quality differences—a crucial tool for analyzing market fundamentals amid fluctuating economic conditions.

In nominal terms, prices remain elevated compared with last year. Still, the real decline indicates erosion of real estate value once inflation is factored in, highlighting affordability pressures and cooling demand patterns in several provinces.

Major Cities: Growth Continues but Divergence Widens

Turkey’s three largest metropolitan markets—Istanbul, Ankara, and Izmir—each posted month-to-month increases, though at varying intensities:

• Istanbul: +2.7%

• Ankara: +1.0%

• Izmir: +1.8%

On an annual basis, these cities also showed substantial nominal price gains:

• Istanbul: +32.4%

• Ankara: +38.4%

• Izmir: +30.7%

The standout performer remains Ankara, charting the most substantial annual surge among major urban centers. Istanbul’s growth, while strong, continues to stabilize compared with earlier periods of rapid escalation, suggesting a more moderate demand trajectory in Turkey’s largest real estate market.

Regional Breakdown: Sharp Differences Across the Country

The TCMB’s regional analysis, based on the Statistical Region Units Classification (IBBS), underscores pronounced geographical disparities:

• Highest annual increase:
  Ankara region at 38.4%

• Lowest annual increase:
  Aydın–Denizli–Muğla region at 23.1%

These differences reveal how localized factors, such as migration trends, construction activity, fluctuations in the tourism market, and regional income shifts, continue to shape Turkey’s housing landscape. Coastal regions appear to be cooling relative to the capital, where demand remains more resilient.

What This Means for Buyers, Sellers, and Investors

The contrast between nominal and real price movements carries several implications:

1. Inflation is eroding real value

Despite double-digit yearly gains, the real decline indicates that housing as an investment is yielding negative inflation-adjusted returns.

2. Regional strategies matter more than ever

With swings ranging from 23% to nearly 40% annually across regions, market timing and location selection are becoming increasingly crucial for investors.

3. Demand patterns are evolving

The tempered growth in coastal areas compared with Ankara may reflect shifting resident preferences, affordability constraints, or macroeconomic pressures influencing supply-demand dynamics.

4. Market normalization is underway

The combination of slower real growth, moderated monthly increases, and regional divergence suggests a gradual return to more balanced market conditions, particularly after years of accelerated price escalation.

As the final quarter progresses, the housing market’s trajectory will heavily depend on inflation trends, monetary policy decisions, and evolving consumer sentiment. For now, the latest TCMB data makes one thing clear: Turkey’s housing sector is entering a more complex and nuanced phase, where nominal growth and real market performance tell two very different stories.