Turkish lira fluctuations
After lira fluctuations, is real estate investment in Turkey still profitable?
During the last five years, the Turkish lira value has changed a lot. On 22 November 2021, the US dollar exceeded 11.23 Turkish lira. This may make investors ask whether real estate investment is still profitable in Turkey with lira inflation or not. In this article, we tried to answer the most common questions which may matter to real estate investors in Turkey.
How the inflation of the Turkish lira can affect the real estate sector?
The US dollar per Turkish Lira reached 8.32 in September 2021, while in the same month last year it reached 7.377. Despite this inflation of the Turkish lira, the real estate sales by foreign investors have increased by 25.8% in comparison with the same month last year. Does that mean Lira fluctuations have a positive effect on the foreign investor?
We can say that in addition to the facilities and incentives made by the Turkish government to encourage foreign investment, the fluctuations in the Turkish lira have given a lot of advantages to the foreign investor in terms of purchasing power. For example, the properties and investment costs for foreign investors have become cheaper than before, which represents an attractive factor to investment.
To show you what I mean, the Turkish lira to US dollar has changed many times in November, as, on the first of November 2021, the US dollar was about 9.59 Turkish lira and on 20 November it exceeded 11.23.
Thus, when buying an apartment in Turkey worth one million Turkish lira, at the exchange rate of the dollar 9.59 it will be worth about 104.275 dollars. However, when the lira drops to 11.23, the value of the apartment in dollars will reach about 89,047, saving the investor about $15,000.
Therefore, whoever wants to invest in properties in Turkey, has the opportunity now to take advantage of the Turkish lira's depreciation before real estate prices change.
In the long run; Will the investor get more profits?
To answer this question, we will take a look at the Turkish house price index which reached an increase of 33.4% in nominal terms in August 2021 in a comparison with the previous year. That can be evidence of the strength of the real estate sector in Turkey, as the economic crises didn't affect it.
Thus, To make a better profit from your properties, you probably need to wait for several years as investing in real estate is a long-term investment.
Additionally, the Turkish economy is one of the 19 strongest economies in the world and it has the ability to recover quickly from its crises. In short, the profit of real estate investment depends on waiting. The more you wait the more profits you gain.
What if the Turkish Lira improved, what can happen to your investment?
Don't worry, real estate is a growing sector. Therefore, if the price of a property increases, it won't fall again, which can protect you from the loss in your investment.
Baytii tips to take advantage of Turkish lira inflation:
Every investment has risks, and to reduce the risks as possible, investors should search for the best chances in any investment. Therefore, we, in Baytii Real Estate, offer you the best tips to make a great profit from your real estate investment during the lira fluctuations.
1- As we said before, the foreign investor can take advantage of the new exchange rate and buy a property to save costs before the rise in the real estate prices happens as the Turkish lira changes.
2- The foreign investor can buy the property in the Turkish lira, pay a deposit and divide the rest in installments over 24 months to guarantee a greater profit.
For instance, if the installment of the property in Turkey was about 10,000 Turkish lira, 1000 in dollars (when the exchange rate per dollar was 10 Turkish lira) and the following month the exchange rate became 11 Turkish lira per dollar, the monthly installment would be worth 909$. In this case, the investor is saving more than 90$ per month (990 Turkish lira).
3- It is better to consult a professional and reliable real estate company before buying a property. Our company, Baytii for real estate, can provide you with the best real estate consultants who can recommend to you the best construction companies and the best places which can increase your property’s value.
4- Finally, if you want to provide your property for rent, the value of rent is increasing with the dollar.
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Current data indicates that the Turkish real estate market will continue to grow in nominal prices over the coming years. However, it’s important to distinguish between nominal growth and real growth. While Turkey recorded one of the highest annual nominal price increases globally (about 46.4%), real prices have declined by about 14% per year due to high inflation. In other words, although property prices have risen sharply in Turkish lira, the actual purchasing power of these assets has declined. Still, nominal prices are expected to continue rising due to strong domestic demand and limited supply, while real price increases will depend on inflation control.
From a macroeconomic perspective, the Turkish government has shifted to tighter fiscal and monetary policies since mid-2023 to fight inflation. The official Medium-Term Economic Plan targets a reduction in inflation from over 50% to single-digit levels (around 9.7%) by 2026. Credit rating agencies have responded positively—both Fitch and S&P upgraded Turkey's ratings in 2024, reflecting improved fiscal discipline and growing reserves. These developments suggest that, if economic reforms stay on track, we may see a gradual decline in inflation by 2030, leading to greater currency stability and restored investor confidence.
On the supply and demand side, housing production currently falls short of meeting Turkey’s annual housing needs. Industry experts estimate that only about half the annual housing demand is being met, due to rising construction costs and fewer new housing starts. This supply shortage will likely continue to support property prices despite economic fluctuations. On the other hand, foreign demand peaked in 2022 but dropped significantly in 2023–2024 due to new residency restrictions and a higher minimum investment amount for Turkish citizenship (from $250,000 to $400,000). In 2024, foreign purchases accounted for just 1.6% of total property transactions, down from 3–5% in prior years. However, this demand is expected to recover gradually as inflation cools and the lira stabilizes.
Looking ahead to 2030, the Turkish real estate market is expected to remain strong due to fundamental drivers like a large, young population, urban migration, continued infrastructure investments, and tourism in coastal cities. If the government succeeds in reducing inflation to single digits, investors may enjoy both nominal and real capital gains. If inflation persists, price gains may remain largely nominal, offering limited real return for investors. Overall, the prevailing outlook is that the Turkish market will experience greater economic stability and stronger investor confidence by 2026 and beyond.
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