Turkey Launches  Social Housing Rentals  in Istanbul as Prices Hit Record Highs

Turkey is preparing to launch a state-led social housing rental scheme in Istanbul in an effort to curb soaring rents and expand access to affordable housing, Environment, Urbanization and Climate Change Minister Murat Kurum announced this week. The initiative marks the first time the state housing agency TOKİ will rent out properties directly rather than sell them, introducing what officials describe as a new model for Türkiye’s strained housing market.

The programme, part of the government’s wider “Century of Housing Project,” foresees the construction of 500,000 homes across 81 provinces, with 15,000 units in Istanbul specifically allocated for rental use at below-market rates. Authorities say the scheme aims to provide relief to households hit hardest by extreme rent inflation in the country’s largest city.

State Becomes Landlord as TOKİ Launches First Rental Scheme

Minister Kurum announced that TOKİ will serve as the landlord for the 15,000 Istanbul units, which will be allocated through a lottery system. Only applicants who meet predefined social criteria will qualify.

“This is the first time the state will become the landlord,” Kurum said, adding that the rental model is designed to address sharp market distortions caused by excessive rent hikes. The new units will be priced significantly below the average rent in their respective districts.

The minister stressed that the project targets segments of the population struggling to access decent housing at a reasonable cost, particularly in a city where rental inflation has become one of Türkiye’s most acute social and economic pressures.

Rents in Istanbul Reach Unprecedented Levels

The new initiative comes as Istanbul continues to grapple with some of the fastest-rising rental prices in the world. According to July 2025 data from Istanbul Real Estate Valuation, rents have stabilised citywide at an average of 30,000 TL per month, but major coastal and central districts have surged well beyond that.

• Kadıköy: 62,000 TL (citywide highest)

• Sarıyer: 60,000 TL

• Beşiktaş: 52,000 TL

• Bakırköy: 50,000 TL

• Zeytinburnu: 45,000 TL

Rents in Kadıköy and Sarıyer climbed roughly 10% in just one month, reflecting persistent demand pressures aggravated by seasonal movement, student relocations, and limited housing supply.

By contrast, the only districts where average rents still remain below 20,000 TL are:

• Esenyurt: 17,500 TL

• Esenler: 19,500 TL

• Arnavutköy: 20,000 TL

Despite these lower figures, analysts say even these districts have experienced rising interest from residents priced out of central neighbourhoods.

Demand Outstrips Supply as Rental Market Tightens

Real estate experts note that Istanbul’s rental market has now reached a point where supply shortages are more critical than price inflation itself. Vacant apartments in central districts reportedly disappear within days, and some realtors say bidding wars have become increasingly common.

Summer mobility, university placements and internal migration continue to fuel competition for rental units. Many households report waiting weeks for suitable listings—a delay that the new TOKİ project aims to address by offering stable, below-market alternatives.

Istanbul Tops Global Charts for Rent Increases

A 2025 global rent report by Deutsche Bank identified Istanbul as the city experiencing the sharpest rental price increase over the past five years. Dollar-denominated rents in the city have risen by 160%, according to the bank’s data.

Despite this steep climb, Istanbul still ranks 53rd globally in terms of absolute rental costs, well below cities such as New York, London and Hong Kong. Analysts say the combination of currency depreciation and structural supply shortages explains this divergence.

A New Model to Stabilize the Market

The government argues that renting out TOKİ units, rather than selling them, will help stabilise the market more effectively by reducing speculative activity and ensuring long-term affordability.

Officials believe that state-owned rental housing will serve as a “price anchor” in districts where private-sector rents have spiralled out of reach, while also expanding access to safe, regulated housing for low- and middle-income groups.

The 15,000 rental units in Istanbul are expected to be rolled out in phases, with the first lotteries anticipated to begin in 2025. Analysts, however, caution that the scale of the housing crisis means the programme—while a significant shift—will only partially alleviate structural shortages without further reforms and additional supply.

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