Turkey housing market leans on local demand as foreign buying falls

Passportivity says Türkiye’s housing market is entering 2026 with stronger domestic demand, higher borrowing costs and weaker foreign purchases shaping returns. The report points to rising nominal prices, solid rental yields in major cities and a citizenship-by-investment route that still requires strict property checks.

Why it matters: - Türkiye’s housing market is becoming a more local, less foreign-driven market, which changes how investors should judge liquidity, pricing power and resale prospects. - Inflation and high interest rates are making headline price gains less useful on their own, especially for buyers comparing returns in foreign currencies. - Rental income, location quality and legal eligibility are emerging as the bigger decision points for international buyers.

What happened: - Passportivity published a 2026-2030 outlook on the Turkish residential market covering prices, sales trends, rental yields and foreign demand. - Around 1.7 million homes were sold in Türkiye in 2025. - Foreign buyers completed 21,534 purchases in 2025, equal to 1.3% of total sales. - Foreign demand peaked in 2022 at 67,490 purchases, or 4.5% of transactions. - In April 2026, Türkiye’s housing price index rose 26.6% year over year. - After inflation, residential property values fell 4.3% in real terms. - The average housing loan rate rose from 12.5% in 2020 to 42.7% in 2024. - The share of mortgage transactions fell from 38.2% to 10.7% over the same period.

The details: - The report says domestic buyers now provide most of the market’s liquidity, buying homes for residence, rental income and capital preservation. - Location matters more when local demand drives sales, especially near business districts, universities, hospitals, transport links and other everyday infrastructure. - The average gross residential rental yield in Türkiye stood at 7.32% at the end of 2025. - Istanbul posted a gross yield of 8.17%. - Ankara posted a gross yield of 8.10%. - Izmir posted a gross yield of 6.99%. - Antalya posted a gross yield of 6.14%. - Istanbul, Ankara and Izmir benefit from year-round demand tied to employees, students and local residents. - Coastal markets such as Antalya, Alanya, Bodrum and Fethiye depend more on tourism and seasonal occupancy. - Istanbul remained Türkiye’s largest residential market in 2025, with 280,262 property sales in the province. - That total was more than Ankara and Izmir combined. - Among international buyers, Istanbul, Antalya and Mersin drew the most transactions.

Between the lines: - The report’s message is that popularity with foreign buyers is not the same as long-term market strength. - For domestic resale and rental liquidity, cities with stable permanent populations and strong infrastructure may offer better support than purely tourism-led locations. - The shift from mortgage-backed buying to cash-leaning demand suggests financing conditions are weighing more heavily on the market. - Passportivity’s outlook also implies that inflation-adjusted returns matter more than nominal gains for overseas investors assessing Türkiye. - The citizenship-by-investment angle remains a factor, but property eligibility and legal history can change whether a purchase actually qualifies.

What's next: - Passportivity forecasts Türkiye’s residential real estate market could grow from $71.11 billion in 2025 to $90.49 billion by 2030. - Domestic demand is expected to remain the market’s foundation through 2030. - Inflation, interest rates, construction costs and currency movements are likely to keep shaping real returns. - Istanbul is expected to stay the country’s main property market. - Antalya is projected to remain one of the faster-growing destinations. - Foreign investors will likely need to focus more on rental demand, resale liquidity, inflation-adjusted returns and legal due diligence than on headline appreciation alone. - Türkiye’s citizenship-by-investment program allows foreign investors to qualify through residential or commercial property purchases of at least $400,000, with a 3-year holding requirement. - Investors must verify legal status, valuation, ownership history and whether a property has been used in a prior citizenship application before buying.

The bottom line: - Türkiye’s property market still offers income potential and a citizenship pathway, but the best opportunities now depend more on local demand, cash flow and legal clarity than on foreign buyer momentum.