Steep 28% increase in residential property prices observed in July 2023 within Turkey, with over 140,000 houses sold during the month
In the first seven months of 2023, Turkey's residential property market has shown a mixed picture, with a surge in prices and a decline in foreign purchases, amidst a complex housing crisis.
Total sales of residential properties reached 834,751 transactions during the January-July period. Second-hand houses accounted for the majority of these sales, with 98,874 units, representing a 69.2% share. However, foreign home purchases fell 18.6% year-on-year to 1,913 units, accounting for just 1.3% of total sales.
One of the key drivers behind this housing crisis is high inflation, a shortage of affordable housing supply, rising demand due to urban migration, limited land availability in major cities, post-earthquake reconstruction delays, and speculative investment. The 2023 earthquakes severely damaged housing stock in southern Turkey, further straining supply and complicating rebuilding efforts.
To address this crisis, the Turkish government has launched several key measures. They include large-scale social housing projects, plans to build 500,000 social housing units aimed at improving affordability and enabling homeownership, especially for first-time buyers. The government is also extending mortgage maturities to 30–50 years to reduce monthly payments and promote construction of smaller, more affordable housing types.
However, challenges remain in execution and market dynamics. Post-quake housing reconstruction has suffered from unrealistic quick deadlines, opaque planning, and resource shortages leading to low-quality builds and ongoing use of temporary container housing. Experts also warn of speculative pressures in major cities inflating prices and urge rational investment decisions focused on long-term sustainability and local fundamentals rather than price trends.
In July, house prices rose 32.8% year-over-year, with Ankara leading the boom at 42.1%. The average price per square meter in Ankara reached ₺30,060, bringing the average home price to ₺3.9 million. The average sale price for residential property in Turkey was ₺4.4 million ($107,880). Mortgage-backed sales also saw a significant increase, jumping 93.2% compared with the same period last year.
Russian nationals were the largest foreign buyers in July, purchasing 315 homes, followed by Iranian buyers with 152 and German buyers with 135. The Turkish central bank is set to publish the Residential Property Price Index (RPPI) on August 18.
Inflation-adjusted figures showed a 4.9% decline in house prices in Turkey, suggesting they seem undervalued amid tight monetary conditions. However, this is a complex issue, with many factors at play, and the housing market in Turkey continues to evolve.
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