Turkey’s Housing Frenzy: Prices Explode, Foreign Buyers Flee

Turkey’s housing market showed strong momentum in August 2025, with both home prices and sales posting significant increases compared to the previous year.

According to data released by the Central Bank of the Republic of Turkey (TCMB), the House Price Index (KFE) rose 2.53% month-on-month and 31.42% year-on-year in August. Meanwhile, figures from the Turkish Statistical Institute (TÜİK) confirmed that nationwide home sales climbed 6.8% year-on-year to 143,319 units.

Price Growth Across Major Cities

• Istanbul: Home price index increased 3.01% monthly and 30.21% annually.

• Ankara: Prices rose 2.84% monthly and a striking 41.12% annually.

• Izmir: Prices climbed 2.51% monthly and 31.86% year-on-year.

The figures highlight that Turkey’s largest metropolitan areas remain the center of both demand and price appreciation, though Ankara outpaced Istanbul and Izmir in annual growth.

Mortgage Sales Rebound Sharply

One of the strongest dynamics came from mortgage-backed transactions.

• Mortgage Sales in August: 19,712 homes were sold with mortgages, marking a 45.2% increase compared to August 2024. Mortgage-backed sales represented 13.8% of all transactions.

• January–August 2025: Mortgage sales surged 84.6% year-on-year, totaling 141,227 units.

• First-time (new build) mortgage sales: 4,709 units in August, 33,593 in the first eight months.

The sharp rebound suggests improved credit conditions and demand for financing options, despite Turkey’s high interest rate environment.

Other Sales and Market Segmentation

• Other Sales (non-mortgage): 123,607 units in August, a 2.5% annual increase.

• First-Hand Sales: 43,916 units in August (4.8% increase year-on-year), accounting for 30.6% of total sales. For January–August, first-hand sales totaled 295,524 units, up 15.4% year-on-year.

• Second-Hand Sales: 99,403 units in August (7.8% increase), representing 69.4% of all sales. From January–August, second-hand sales reached 682,546 units, marking a 24% increase year-on-year.

Foreign Buyers Pull Back

Despite overall growth in the domestic market, foreign demand continued to weaken.

• August 2025: Only 1,810 units sold to foreign buyers, down 19.8% year-on-year.

• Share of Total Sales: Just 1.3% of all transactions.

• Top Cities for Foreign Sales: Istanbul (671 units), Antalya (576), Mersin (123).

• Top Nationalities: Russians (283 units), Iranians (155), Germans (118).

• January–August 2025: Foreign sales totaled 13,077 units, down 13.2% year-on-year.

The decline reflects tighter regulations, currency volatility, and geopolitical uncertainties that have reduced foreign appetite for Turkish real estate.

Regional Breakdown of Sales

• Top Provinces by Sales (August 2025):

  • Istanbul: 21,814 units

  • Ankara: 12,419 units

  • Izmir: 7,695 units

• Lowest Sales:

  • Ardahan: 49 units

  • Bayburt: 105 units

  • Tunceli: 138 units

These figures underline Istanbul’s continued dominance, accounting for over 15% of all home sales in Turkey.

January–August 2025 Overview

From January to August 2025, Turkey’s housing sector recorded 978,070 total home sales, a 21.3% increase year-on-year.

This robust performance reflects strong domestic demand, boosted mortgage activity, and relative resilience of the real estate market despite ongoing macroeconomic challenges such as inflation and tight monetary policy.

Market at a Crossroads

Turkey’s housing market in August 2025 revealed a dual picture:

• Domestic demand and mortgage activity are accelerating sharply, driving both sales and prices higher.

• Foreign investment is shrinking, underscoring concerns over Turkey’s investment climate and tighter controls.

With the House Price Index up 31% annually and sales nearing 1 million units in just eight months, the sector remains one of the hottest segments of Turkey’s economy—though the sustainability of this surge will depend heavily on inflation, interest rates, and global investor confidence.