Demand for Smaller Homes Surges in Istanbul

According to a recent report by KONUTDER, Istanbul will require 1.22 million new housing units over the next decade due to a combination of shifting demographics, population trends, and urban migration patterns. This translates to a construction need of approximately 122,000 new homes annually.

The report highlights the rising demand for smaller housing units, such as studio apartments (1+0) and one-bedroom flats (1+1), driven by an increasing number of single-person households, a growing unmarried population, and the city’s aging demographic structure.

Reverse Migration Slows, But Aging Accelerates

One of the most striking observations in the report is the shift in migration dynamics. Istanbul, which recorded a net population loss of 336,000 in 2023, is projected to see this number drop to 20,000 by 2025. By 2034, the city is expected to gain 109,000 residents.

However, the aging population remains a key concern. Currently, individuals aged 50 and above make up 25% of the population, and this figure is expected to rise to 33% within 10 years.

Ramadan Kumova, Chairman of KONUTDER, noted that while COVID-19 and economic volatility caused fluctuations in migration patterns, the trend is likely to stabilize moving forward. He emphasized that single-person households now account for 21% of the total—up from 17.1%, while the proportion of single adults has risen from 42% to 44%.

Marriage Rates Decline, Divorce Rises: Changing Household Structure Drives Demand

The report also examines how declining marriage rates and rising divorce rates are reshaping housing demand. Kumova stated that Istanbul will need approximately:

• 3,300 homes per year for university students,

• 4,800 units for tourism-related accommodations,

• 4,200 units for foreign investors, and

• 3,000 homes for secondary residences.

Economic Volatility, Interest Rates, and Real Estate Investment

Real estate expert Şerif Varlı assessed the market’s sensitivity to exchange rate fluctuations and interest rate movements. Varlı highlighted that property is still seen as a safe haven in the face of currency instability.

He noted that while high interest rates have temporarily suppressed demand, a return to reasonable borrowing costs would restore real estate as a preferred investment vehicle.

“Prices in USD terms remain relatively stable,” said Varlı, “but rental yields are trending upward, making cities like Istanbul and Antalya especially attractive to foreign buyers. The improving rental return ratios signal a positive outlook for property investors.”

Record Outmigration: Istanbul’s Population Drain Slows but Doesn’t Stop

The report further confirms a record-breaking trend in reverse migration. In 2023 alone, Istanbul saw a net loss of 168,623 people, marking the sharpest population decline in recent memory.

While this number is expected to drop significantly in the coming years, the aging profile of the city remains a challenge, with projections suggesting that more than one-third of residents will be over 50 by 2034.