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This article was originally written using January 2025 housing market data published by the Central Bank of the Republic of Türkiye (TCMB). Market conditions, inflation levels, interest rates and residential property prices may have changed significantly since publication.

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The Housing Price Index (KFE), which tracks quality-adjusted residential property prices in Türkiye, continued its upward trend in January 2025, rising by 4.7% month-on-month to reach 165.9. This continued the positive momentum seen in recent months, with property prices beginning to recover in real terms after a prolonged period of lagging behind inflation.

On an annual basis, residential property prices across Türkiye increased by 31.9% nominally. However, when adjusted for inflation, prices still declined by 7.2% in real terms. By comparison, the previous month recorded annual nominal growth of 29.4%, suggesting that price appreciation has started accelerating once again.

Price Changes in Istanbul, Ankara and Izmir

The January 2025 figures for Türkiye’s three largest housing markets showed continued monthly growth:

  • Istanbul: Residential property prices increased by 3.0% during January, with annual growth reaching 29.6%.
  • Ankara: The capital recorded the strongest monthly performance, rising by 5.7%, with annual growth of 36.6%.
  • Izmir: Property prices rose by 4.9% in January, while annual growth reached 29.6%.

Despite the nominal increases, inflation-adjusted pricing across all three cities remained negative year-on-year. However, the pace of real-term declines has started easing compared to previous quarters.

Housing Price Trends Over the Last 12 Months

According to data published by the Central Bank of the Republic of Türkiye (TCMB), the Housing Price Index continued to show steady annual expansion throughout 2024 and into 2025.

  • January 2024 – January 2025: The index increased from 125.71 to 165.87, representing annual growth of 31.9%.
  • Strongest Monthly Increase: The highest monthly increase during the period occurred in May 2024, with growth of 3.92%.
  • Slowest Monthly Increase: The weakest monthly performance was recorded in September 2024, when prices rose by 1.03%.
  • Annual Growth Comparison: Annual nominal growth has moderated significantly compared to the inflation-driven surge seen during 2023, when yearly increases exceeded 83%.
Annual and monthly housing price changes in Türkiye during 2024 and 2025

The latest figures suggest that Türkiye’s housing market is entering a more balanced phase. While nominal price growth remains positive, the market is gradually transitioning away from the extreme inflationary conditions seen in previous years.

Investor Sentiment and Market Reactions

Following publication of the latest Housing Price Index data, Turkish real estate and construction-related equities also showed positive momentum.

  • BIST Construction Index (XINSA): Continued to record notable gains, reflecting stronger investor sentiment toward the construction sector.
  • BIST REIT Index (XGMYO): Real estate investment trusts attracted renewed market interest following improving housing data.
  • Emlak Konut: Shares in one of Türkiye’s largest state-backed developers rose by 7.53%.
  • Enka İnşaat: The major construction company recorded a 3.28% increase in share value.

The improving sentiment suggests that investors increasingly believe the Turkish housing market may be stabilising after a prolonged period of inflation-adjusted weakness.

Expectations From the Turkish Central Bank

Investors and homebuyers will continue closely monitoring the Central Bank’s monetary policy decisions throughout 2025, as interest rates remain one of the most important drivers of housing affordability and property demand.

The Turkish Central Bank has already started easing rates, implementing a 2.5% reduction in March 2025, lowering the benchmark rate from 45% to 42.5%. Much of the recent housing market recovery had already been partially priced in by investors anticipating future rate cuts.

With inflation cooling to approximately 2.27% month-on-month during March and annual inflation moderating toward 39%, markets increasingly expect additional monetary easing measures during the remainder of 2025.

If inflation continues stabilising and financing conditions improve further, Türkiye’s residential property market may enter a new growth phase characterised by more sustainable price appreciation and stronger real-term performance.