Global Housing Reality Check: Istanbul Is Cheap—But Still Out of Reach

Despite widespread perceptions of a housing affordability crisis in Türkiye, global comparisons show that Istanbul remains relatively cheap. However, weak income distribution and a broken financing system are making homeownership increasingly inaccessible for large segments of the population.

Istanbul Remains Cheap by Global Standards

Debates over soaring housing costs in Türkiye often overlook a critical fact: in global terms, Istanbul is not an expensive property market.

According to international data, price per square meter stands at roughly:

• Tel Aviv: $14,800
• Paris: $11,000
• Amsterdam: $11,000
• London: $9,800
• Istanbul: ~$1,700

Even compared to peer emerging markets, Istanbul ranks lower. Cities like São Paulo and Buenos Aires exceed $2,000 per square meter, while regional capitals such as Sofia and Belgrade also command higher prices.

This suggests that Istanbul’s housing market is not overpriced in absolute terms—it is relatively undervalued.

The Real Problem: Income and Access

The affordability crisis becomes clear when housing costs are measured against income.

The number of months required to purchase one square meter of housing reveals the deeper issue:

• New York: 0.92 months
• Paris: 3.35 months
• Tel Aviv: 4.25 months
• Istanbul: 1.35 months

While Istanbul appears more affordable in this metric than many global cities, the uneven distribution of income means that a large portion of the population still cannot meet this threshold.

The issue is therefore not price levels alone—but access to income and financing.

Homeownership Rates Signal Structural Weakness

Türkiye’s homeownership rate stands at 56%, placing it near the bottom of Europe.

By comparison:

• Albania: 96%
• Romania: 94%
• Slovakia: 93%
• Croatia: 91%

Countries like Germany, Austria, and Switzerland also have lower ownership rates, but these are supported by well-developed rental systems—something Türkiye lacks.

This points to a deeper structural housing problem rather than a simple pricing issue.

Mortgage Market Breakdown

One of the clearest indicators of the crisis is the collapse in mortgage-backed home sales.

As of February 2026, mortgage sales accounted for just 20% of total transactions, down from over 42% in 2013.

This sharp decline shows that the middle class is increasingly excluded from the housing market, as access to long-term financing has deteriorated.

Safe Haven Demand Distorting the Market

Today’s housing demand is no longer driven by first-time buyers, but by existing asset holders.

In an environment of economic uncertainty, investors are reallocating capital into real estate as a traditional safe haven. This trend reinforces price pressures in certain segments while doing little to improve accessibility.

The Need for Financial System Reform

At the core of the problem lies Türkiye’s outdated banking model.

The current “originate and hold” system forces banks to retain mortgage loans on their balance sheets, limiting their ability to extend long-term credit.

Experts argue that Türkiye must transition to an “originate and distribute” model, where mortgages are securitized and sold to capital markets.

Such a shift would:

• Expand credit availability
• Enable longer-term (20–30 year) mortgages
• Reduce pressure on bank balance sheets

Without this transformation, resolving the housing affordability crisis will remain difficult.

Conclusion: A Systemic, Not Pricing, Crisis

Data clearly shows that Istanbul is not an expensive housing market by global standards.

However, income inequality, limited access to credit, and structural deficiencies in the financial system are preventing large segments of society from accessing homeownership.

Türkiye’s housing challenge is not primarily about high prices—but about a broken system of access.

By Samet Sakal, City Planner