Buying Property in Turkey! Is This the Right Time or a Risky Investment to Avoid?
Turkey's economy & real estate
The real estate market in Turkey is currently facing numerous challenges, starting with an economy impacted by a massive earthquake that hit the country last year, alongside high inflation. This has led to interest rates being raised to a record high of 50%, resulting in a near-total halt of the real estate sector. Additionally, recent legal changes, such as raising the minimum investment for Turkish citizenship to $400,000 and for real estate residency to $200,000, have caused a decline in the number of foreign investors.
To answer the question: is now the right time to buy property in Turkey, or not? We need to analyse two aspects: the internal Turkish situation and the regional and global outlook.
Internal Situation in Turkey
The internal outlook for Turkey is relatively positive. Economically, key indicators have started to show improvement. Turkey’s foreign reserves have grown from a deficit to over $140 billion, which has led to a gradual decrease in inflation. Interest rates are also expected to start declining gradually at the beginning of 2025. However, this decrease in interest rates will not have an immediate significant impact on the real estate market, as the reduction is expected to be modest and may not provide a substantial boost right away. Instead, the effects are likely to become more noticeable in the second half of 2025, with the real estate sector regaining strength between 2026 and 2027. Currently, prospective buyers can find attractively priced apartments, often lower than pre-2023 prices, alongside unique offers and incentives from construction companies that have not been common in Turkey before.
Regional and Global Situation
On the regional and global front, the outlook is more pessimistic. The region is fraught with conflicts, and the global economy is grappling with crises amid fears of larger conflicts involving major powers. Such a situation is expected to impact the real estate sector in Turkey and other countries negatively, with the degree of impact depending on how events unfold. Perspectives are divided here. One view is that holding cash provides flexibility, allowing individuals to adapt to economic changes, avoid financial crises, and seize opportunities as they arise. The other perspective argues that in times of severe crises, cash can be at risk of losing value due to inflation, especially if the situation spirals out of control. Real estate, on the other hand, is seen as a safer asset; even if its value declines, it remains a tangible asset and will likely appreciate over time.
Conclusion
I would advise real estate investors to consider purchasing property in Turkey now to take advantage of the favorable prices and incentives, but only on one condition: having the financial stability to avoid needing to sell the property urgently, with the ability to hold the investment not for months or a single year, but potentially for several years if necessary. For those aiming to buy and then sell quickly for immediate profit, this would be a high-risk strategy with a strong chance of loss.
Related Articles
Why Al Marjan Island Is the Middle East’s Most Promising Real Estate Investment Opportunity
Al Marjan Island, located in the Emirate of Ras Al Khaimah, is rapidly becoming one of the UAE’s most talked-about investment hotspots. With the launch of Wynn Al Marjan Island — the first legal casino resort in the Middle East — and limited remaining land for future development, investors are eyeing this prime location as a once-in-a-generation opportunity.
Dubai’s First-Time Home Buyer Programme: A Game-Changer for Emiratis and Expats Alike
Dubai has just launched a groundbreaking initiative — the First-Time Home Buyer Programme — aimed at helping both Emiratis and expatriates step onto the property ladder. Launched by the Dubai Land Department (DLD) and the Dubai Department of Economy and Tourism (DET), this initiative is a key part of the Dubai Real Estate Strategy 2033 and the D33 Economic Agenda, setting the stage for a more inclusive and thriving property market.
Analysis of the Turkish Real Estate Market: Outlook for the Next Five Years
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.
Comments (0)
You need to be logged in to comment