Regal Realty | Annual Market Intelligence Report | Istanbul, Turkey

Executive Summary
 

Turkey's real estate market enters 2026 at a pivotal inflection point. After three years of extraordinary nominal price growth driven by inflation, followed by a deliberate stabilization phase through 2024–2025, the market is now transitioning into a new cycle defined by sustainable, real capital appreciation.
 

Key headlines from this report:
 

• Total market value forecast to grow from $110 billion (2025) to $187 billion by 2030 — an 11% CAGR

• Residential sales reached 834,751 units in the first seven months of 2025 alone — a 24.19% year-on-year increase

• National average gross rental yield stands at 7.32% as of Q1 2026

• Inflation declining from 72.3% (2022 peak) toward a 16–21% target by end 2026

• Policy interest rates on a confirmed downward path from 46% (2024 peak) toward 25% by end 2026

• Three global rating agencies — Fitch, S&P, and Moody's — all upgraded Turkey's sovereign credit rating in 2024

• Foreign buyer share currently at 1.6% of total sales — significantly below its 3–5% historical average — presenting a clear re-entry opportunity
   

1: Macroeconomic Context
 

1.1 Economic Stabilization in Progress

Turkey's macroeconomic environment in 2026 reflects the results of a sustained and deliberate policy shift initiated in mid-2023. The Central Bank of the Republic of Turkey (CBRT) pursued aggressive monetary tightening, raising the policy rate to a peak of 46% in order to bring inflation under control following its extraordinary 2022 peak.
 

The results are increasingly visible. Consumer Price Index (CPI) inflation, which reached 72.3% in 2022, has been on a consistent downward trajectory — falling to 58.5% in 2024 and 33% through mid-2025. Official targets and international forecasts project inflation to reach 16–21% by end of 2026, with a medium-term target of single-digit inflation representing a fundamental transformation of the economic environment.
 

GDP growth, while moderate, remains positive and accelerating. The World Bank projects GDP growth of 3.1% in 2025, rising to 3.6% in 2026 and 4.2% in 2027. The IMF's July 2025 World Economic Outlook similarly projects 3.0–3.3% growth through 2026. The OECD's 2025 Economic Survey forecasts 3.9% GDP growth for 2026, alongside inflation falling to 17%.
 

1.2 Credit Rating Upgrades Signal Institutional Confidence

A significant marker of Turkey's restored economic credibility came in 2024, when all three major global rating agencies upgraded Turkey's sovereign credit rating:
 

Agency                  Action                          Rating                       Outlook

Fitch                Upgraded 2024                  BB                            Positive

S&P                 Upgraded 2024                    B+                           Positive

Moody's First upgrade in 11 years         B1                             Stable
 

These upgrades reflect improving fiscal discipline, growing foreign exchange reserves, tighter monetary policy, and renewed investor confidence. Critically, with no elections in Turkey until 2028, the current reform path carries multi-year political stability — a key requirement for sustained foreign investment.
 

1.3 Interest Rate Trajectory: The Critical Catalyst

The single most important macroeconomic variable for Turkey's real estate market is the trajectory of interest rates. Historical data is unambiguous: every significant decline in Turkish interest rates has been followed by a strong real estate boom.
 

Current rate trajectory:

• Peak (2024): 46%

• End 2025 target: ~35%

• End 2026 target: ~25%
   

At 25%, mortgage affordability begins to recover meaningfully for domestic buyers — a cohort that has been largely absent from the market since 2023. Their return is expected to generate a demand surge that will drive the next price appreciation cycle.
 

2: Residential Market Analysis
 

2.1 Transaction Volumes

Turkey's residential market demonstrated strong recovery momentum through 2025. According to TURKSTAT (Turkish Statistical Institute):
 

• 834,751 homes sold nationwide between January–July 2025

• Representing a 24.19% year-on-year increase

• Full-year 2025 sales forecast: 1.5–1.6 million units (up from 1.48 million in 2024)

• Mortgage-backed purchases nearly doubled year-on-year as periodic rate easing windows opened
   

Regional breakdown of 2025 sales (Jan–Jul):
 

City                                                                         Share of National Sales                                                YoY Growth

Istanbul                                                                                   17%                                                                       +24.56%

Istanbul + Ankara + Izmir + Antalya                 37% combined                                                            +26.31%
 

2.2 Price Performance

Average property prices have continued to rise in nominal terms. Over the 12 months to mid-2025, average prices rose approximately 30% nominally. However, the critical shift being monitored by analysts is the transition from nominal to real price growth — i.e., appreciation above and beyond the inflation rate.
 

• During 2021–2022: Turkey topped global charts with 46% nominal gains, but real values fell 14%/year due to inflation above 50%

• During 2023–2024: Market correction phase — real prices flat to negative in many cities

• 2026 and beyond: Analysts forecast a return to 2–4% real price growth above inflation — the first genuine capital appreciation cycle since 2020
   

National average price per sqm stands at approximately $825 nationwide. However, this masks significant variation by city and segment:
 

City                                  Average Price/m² (2025)                              Premium Districts

Istanbul                                       ~$1,630                                                   $3,000–$5,000+

Bodrum                                       ~$2,825                                                   $4,000–$8,000

Antalya                                        ~$1,200                                                   $2,000–$3,500

Izmir                                      Below Istanbul                                             $1,500–$2,500

Mersin                                Lowest major city                                          $600–$1,000
 

2.3 Rental Market Performance

Turkey's rental market remains one of the strongest globally. Key metrics as of Q1 2026:
 

• National average gross rental yield: 7.32% (Global Property Guide, Q1 2026)

• Previous Q3 2025 reading: 7.76%

• Istanbul gross yield: approximately 4.5–6%

• Ankara, Izmir, Antalya yields: 7–8%

• Antalya (short-term/tourism rental): 6–8% gross
   

For context, Turkey's 7.32% national rental yield compares favorably against:

• Dubai: 6.8%

• UK average: 4.3%

• Paris: 3.5%

• Amsterdam: 3.0%
   

2.4 Supply-Demand Dynamics

A structural housing shortage continues to underpin Turkey's market against any major price devaluation. Key supply constraints include:
 

• Construction cost inflation: Elevated import costs and material prices have suppressed new project launches since 2022

• Post-earthquake reconstruction: The February 2023 earthquakes redirected significant construction resources to replacement housing rather than new supply

• Annual supply deficit: Industry estimates suggest current housing production covers only approximately 50% of annual demand

• Demographic pressure: Turkey's population exceeds 85 million, with continued urbanization driving sustained housing demand in major cities
   

This supply-demand imbalance creates a structural floor under prices, even in periods of reduced transaction volumes.
 

3: Foreign Investment Analysis
 

3.1 Current State of Foreign Purchases

Foreign buyer activity declined sharply from its 2022 peak. In the first half of 2025, approximately 9,354 homes were purchased by foreign nationals — with June 2025 showing 1,565 sales, up 8.7% year-on-year, suggesting the bottom may have been reached.
 

Historically, foreign buyers have represented 3–5% of total Turkish property sales. In 2024, this fell to just 1.6% — a near-decade low, driven by:
 

• Currency volatility reducing the lira's purchasing power

• Higher and more complex investment thresholds for citizenship applications

• Stronger competition from other citizenship-by-investment destinations

• Reduced international promotion of the Turkish market
   

3.2 Top Foreign Buyer Nationalities (2024–2025)
 

Rank                                Nationality                          Primary Markets

1                                          Russian                              Antalya, Istanbul

2                                        Ukrainian                              Antalya, Mersin

3                                          Iranian                                 Istanbul, Ankara

4               Gulf nationals (KSA, UAE, Kuwait)     Istanbul, Bodrum

5                              European buyers                 Bodrum, Fethiye, Antalya
 

3.3 Forecast: Foreign Buyer Recovery

Multiple industry analysts and market reports project a gradual recovery in foreign buyer activity through 2026–2027, driven by:
 

• Declining inflation and lira stabilization reducing currency risk perception

• Interest rate cuts improving the market's overall investment narrative

• Continued $400,000 citizenship threshold providing a clear, stable investment pathway

• In Istanbul and Antalya coastal districts, foreign-buyer ratios in some months already exceed 40% of monthly deeds
   

4: Market Forecast 2026–2030
 

4.1 Market Size Projections
 

Year                             Projected Market Value                             Growth

2025                                     $110 billion                                            Baseline

2026                                   ~$122 billion                                             +11%

2027                                   ~$135 billion                                             +11%

2028                                   ~$150 billion                                             +11%

2029                                   ~$166 billion                                             +11%

2030                                      $187 billion                                        +11% CAGR
 

Source: Mordor Intelligence, Global Citizens Solutions, market consensus
 

4.2 Segment Forecasts

• Luxury housing: 6.96% CAGR through 2030, driven by foreign buyer demand and waterfront developments

• Antalya residential: 7.68% CAGR to 2030 — fastest growing major city market

• Commercial real estate: Market estimated at $56+ billion in 2026, growing rapidly on logistics, retail, and office demand

• Short-term rental/Airbnb: Continued strong performance in all major tourist cities
   

4.3 Price Forecast 2026

• Nominal price growth 2026: 10–18% nationally

• Real price growth (above inflation): Expected to turn positive in late 2026 for the first time since 2021

• New-build price growth: Expected to outperform secondary market due to elevated construction costs
   

4.4 Risk Assessment
 

Risk Factor                                          Level                                          Mitigation

Currency volatility                          Medium             Hard currency purchases hedge this risk

Inflation persistence                     Medium                  Currently on clear downward trend             
Regulatory changes                 Low-Medium         No elections until 2028 provides stability

Regional geopolitics                      Low          Turkey's NATO membership provides security umbrella

Oversupply (luxury)                       Low                   Structural deficit in overall housing supply
 

5: City-by-City Investment Analysis
 

Istanbul

Turkey's largest city and economic capital, accounting for 17% of all national property sales. Istanbul offers the deepest liquidity, strongest long-term capital appreciation, and widest range of property types from budget apartments to ultra-luxury Bosphorus waterfront residences.
 

• Best for: Long-term capital appreciation, liquidity, citizenship investment

• Average price: ~$1,630/m² citywide; $3,000–$5,000 in premium districts

• Gross rental yield: 4.5–6%
   

Antalya

Turkey's fastest-growing major real estate market, forecast at 7.68% CAGR to 2030. Year-round tourism, a growing expat community, and improving infrastructure make it the top choice for yield-focused investors.
 

• Best for: Rental yield, short-term rental, lifestyle investment

• Average price: ~$1,200/m²

• Gross rental yield: 6–8%
   

Bodrum

Turkey's premier luxury coastal market. Limited supply combined with growing domestic and international luxury demand creates sustained price appreciation. Preferred by Gulf investors, European buyers, and high-net-worth individuals seeking trophy assets.

• Best for: Luxury assets, capital preservation, lifestyle

• Average price: ~$2,825/m²

• Gross rental yield: 5%
   

Izmir

An underrated market offering strong value, coastal lifestyle, and a growing technology and business sector driving year-round rental demand. Less volatile than Istanbul with steady appreciation.

• Best for: Value investing, balanced yield and appreciation

• Average price: Below Istanbul average

• Gross rental yield: 5–5.5%
   

Mersin

An emerging port city with the lowest entry prices of any major Turkish market. Infrastructure investment and urban development create significant upside for early-stage investors.

• Best for: Early-stage investment, budget entry, long-term appreciation

• Average price: Among the lowest nationally

• Gross rental yield: ~4%
   

6: Citizenship by Investment
 

Turkey's Citizenship by Investment (CBI) program remains one of the most accessible and fastest routes to a second passport globally:

• Minimum investment: $400,000 in real estate

• Processing time: 3–6 months

• Holding period: Minimum 3 years

• Visa-free / on-arrival access: 110+ countries

• Additional requirements: SPK valuation, DAB (foreign exchange document), title deed restriction annotation
   

The program continues to attract investors primarily from the Middle East, North Africa, Russia, and the CIS region, with Istanbul and Antalya coastal districts recording the highest concentration of citizenship-linked transactions.
 

7: Key Investment Recommendations

Based on the data and analysis in this report, Regal Realty's research team identifies the following strategic conclusions for investors:
 

1. The Entry Window Remains Open — But Not Indefinitely The current combination of depressed foreign buyer activity (1.6% vs historical 3–5%), high interest rates suppressing local competition, and hard currency advantages for USD/EUR buyers represents a structurally advantageous entry point. This window narrows as interest rates fall and local buyers return.
 

2. Cash Buyers Hold Maximum Advantage Cash transactions in Turkey currently command 5–15% negotiated discounts. Hard currency buyers gain an additional structural advantage from the lira's ongoing weakness vs. nominal price stability.
 

3. Target Infrastructure Corridors in Istanbul Areas adjacent to new metro lines, urban transformation zones, and infrastructure projects — particularly Kağıthane, Eyüp, Başakşehir, and Ataşehir — offer the strongest combination of affordability and appreciation potential.

4. Antalya for Yield, Istanbul for Capital Growth, Bodrum for Luxury Investor strategy should be determined by primary objective: rental income (Antalya), long-term capital appreciation (Istanbul), or luxury asset ownership (Bodrum).
 

5. Maximize the 5-Year Tax Exemption Properties held for more than 5 years are fully exempt from Turkish capital gains tax — one of the most investor-friendly tax structures in the region. Investors should structure entry with this timeline in mind.
 

About This Report

This report was prepared by Regal Realty's research division based on data from TURKSTAT, the Central Bank of the Republic of Turkey (CBRT), Global Property Guide, Mordor Intelligence, the World Bank, IMF, OECD, Property Turkey, and other cited sources. All market data reflects the most recently available figures as of Q1 2026.
 

Regal Realty is a premium real estate consultancy headquartered in Istanbul, Turkey, specializing in investment properties, luxury real estate, and citizenship by investment advisory for international clients.
 

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