Private Think-Tank:  House prices, rents decline in real terms

While Central Bank of Turkey December data indicates house prices are still increasing at a pace faster than official CPI, a new report by leading auto and house e-commerce website and  Betam Research Center associated with Bahçeşehir University, covering January data claims the opposite.


In the “sahibindex Rental and Sale Housing Market Outlook” February report prepared in cooperation with and Bahçeşehir University Economic and Social Research Center (BETAM), the changes in the rental and sale housing market were scrutinized.

According to the report, it is observed that the decline in real sales prices has been in progress  for 7 months. The annual rate of decline in real prices reached -5.5 percent across the country, -10.9 percent in Istanbul and -7 percent in Izmir. There was a decrease in Ankara, too,  but it remained at 3.5 percent. The annual rate of nominal increase in prices decreased by 9.4 points across the country compared to December, falling to 55.7 percent.


The decline in real house prices continues

The real house price index across the country, which has been increasing continuously since May 2020, decreased in January as in the previous 6 months. The real house price index was 177.7 in January, with a decrease of 8.7 points compared to December. While the inflation rate from December to January was approximately 6.7 percent, the current house price increase throughout Turkey remained at 1.7 percent in the same period. The average m2 price of housing for sale is 36,722 TL in Istanbul, 20,000 TL in Ankara and 30,125 TL in Izmir.


House sales decline in January

House sales in Turkey decreased by 17.8 percent in January compared to the same month of the previous year and became 80 thousand 308. House sales to foreigners decreased by 50.5 percent in January compared to the same month of the previous year and became 2 thousand 61. The contraction follows the central banks efforts to rein in Turkey’s very high inflation rate as the policy rate was carried up to 45% from 8.5% back in June 2023.


Central Bank’s KPI index (2017=100), which is calculated to monitor the quality-adjusted price changes of houses in Turkey, increased by 1.1 percent in December compared to the previous month, reaching 1163.2.

While KPI increased by 75.5 percent on an annual basis in December, the real increase in this period was 7.1 percent.

When we look at the KPI change for three major provinces, an increase of 0.1, 2.5 and 3.5 percent was observed in Istanbul, Ankara and Izmir, respectively, in November compared to the previous month.


Annual real rent increase slowing down

Annual increases in inflation-adjusted  rents throughout Turkey have been decreasing for a long time. The annual increase in average real rent decreased after peaking at 86.6 percent in February 2023. Although it increased slightly from May to June, the decline continued, and from December to January it decreased by 4 points to 9.5 percent.



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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.