Turkey is one of the most promising emerging real estate markets attracting foreign investor interest. With a population of approximately 84 million and an economy ranked among the world’s top 20, the country offers a robust domestic demand base that supports the property market. In recent years, Turkey has experienced significant fluctuations in real estate prices and demand, particularly in major cities. This analytical article reviews recent historical developments in the Turkish real estate market—focusing on Istanbul and Bursa as primary examples—while analyzing the political and economic factors at play, current investment opportunities, and comparisons with similar international markets such as Dubai, Spain, and Greece. Lastly, it explores future trends in this vital sector. The analysis is presented in a formal style, supported by data to provide a comprehensive view of the advantages and challenges facing foreign investors in Turkey’s real estate market.

Historical Overview: Price and Demand Trends in Recent Years

Istanbul: The Largest Market with Massive Price and Demand Increases

Istanbul is the main driver of the Turkish real estate market, being the largest city in both population and economic output. In recent years, the city has witnessed a notable real estate boom fueled by a combination of strong domestic demand, financial inflation, and currency depreciation. For example, housing prices in Istanbul rose by approximately 75% in just one year during a recent period, and by around 122% over two years—an unprecedented increase that even outpaced the devaluation of the Turkish lira against foreign currencies during that time.

These sharp nominal price increases were largely driven by domestic buyers seeking property as a safe haven amid rising inflation and a weakening currency. However, when adjusted for high inflation, the real price growth was significantly lower. In fact, real estate prices in Istanbul actually fell by about 8.8% in 2024 when measured in inflation-adjusted terms.

On the demand side, Istanbul continued to dominate residential real estate sales in Turkey. In 2024, approximately 239,213 residential units were sold in the city—a 20.4% increase compared to the previous year—confirming a recovery after a slowdown in 2023. This strong demand makes Istanbul the most liquid and active market in the country and the historical top choice for foreign buyers in Turkey. In 2024, the average price per square meter in Istanbul reached approximately 55,500 Turkish liras (around $1,520), making it the most expensive city in Turkey for residential property—though still much cheaper than major global cities.

Bursa: Sustainable Growth and a Market Attractive to Both Locals and Foreigners

Bursa, Turkey’s fourth-largest city, offers a strong example of a growing regional market that combines investment appeal with a high-quality lifestyle. During the same period that Istanbul experienced its price surge, Bursa saw a price increase of around 56% in just one year. Over two years, prices rose approximately 103%, indicating a solid upward trend supported by both domestic demand and foreign purchases—although the latter remains smaller than in Istanbul.

In addition to rising prices, Bursa also experienced an increase in annual sales volume. In 2024, around 53,362 residential units were sold in the city—a year-on-year growth of 17.5%. While Bursa accounts for only about 3.6% of Turkey’s total real estate market, its importance lies in its dual role as an industrial and touristic hub. It is known for its automotive and textile industries as well as its natural beauty, including Mount Uludağ and its ski resorts. These features make Bursa’s real estate attractive to locals and an increasing number of regional investors.

Bursa also offers more affordable property prices compared to Istanbul, resulting in relatively high rental yields. The average gross rental return in Bursa is about 7.4% per year—a competitive rate reflecting the lower property costs relative to rental income.

Other Turkish Cities: Ankara, Izmir, and Antalya

In addition to Istanbul and Bursa, other major Turkish cities have seen notable real estate developments in recent years.

Ankara, the political capital and second-largest city, has experienced strong real estate growth driven mainly by domestic demand—especially due to the relocation of government employees and workers in public-related sectors. In 2024, approximately 134,046 residential units were sold in Ankara, marking a 17.1% increase compared to 2023.

Izmir, the third-largest city and a coastal hub in western Turkey, recorded 80,398 units sold in 2024—a year-on-year growth of 22.8%. The city’s appeal lies in its mix of business opportunities and high living standards along the Aegean Sea.

Antalya, the tourism capital on the Mediterranean, saw 77,512 residential sales in 2024—up 19.8% from the previous year. This reflects sustained demand from both local buyers and foreign nationals seeking vacation homes or permanent residences, despite an overall decline in foreign purchases (discussed later).

Here is a comparison of residential sales in major Turkish cities in 2024 versus the previous year:

City Units Sold (2024) Yearly Change (2024 vs 2023)
Istanbul 239,213 +20.4%
Ankara 134,046 +17.1%
Izmir 80,398 +22.8%
Antalya 77,512 +19.8%
Bursa 53,362 +17.5%

All of these cities experienced double-digit growth in sales volume during 2024, signaling a recovery and revitalization of domestic demand. Overall, real estate sales in Turkey climbed back to 1.48 million units in 2024, approaching the peak levels of 2020—after a sluggish 2023, which saw only around 1.2 million units sold. This recovery occurred despite a drop in foreign buyer activity, indicating that domestic demand was the primary engine of the market’s resurgence.

Political and Economic Influences on the Turkish Real Estate Market

Turkey’s real estate market has undergone sharp fluctuations in recent years, largely due to political and economic developments. At the heart of these changes is the Turkish lira’s exchange rate, which has seen a dramatic decline over time. For example, the exchange rate dropped from 5.85 lira per US dollar at the end of 2019 to around 18.66 by the end of 2022—a roughly 69% depreciation in just three years.

This decline had two opposing effects: on one hand, Turkish real estate became much cheaper for foreign investors dealing in dollars or euros, making it an attractive opportunity. On the other hand, the exchange rate volatility introduced a significant risk, as potential returns could diminish when converted back into hard currency.

Inflation was another major factor, with annual inflation rates in Turkey exceeding 60% on average during 2022–2023. As a result, many Turkish citizens turned to real estate as a hedge against inflation and currency devaluation. This surge in demand helped drive up nominal property prices, though real prices (adjusted for inflation) remained relatively flat or even declined.

Monetary policy also played a pivotal role. Following the 2016 attempted coup and the 2018 financial crisis, Turkish authorities maintained artificially low interest rates to stimulate the economy. This led to a record-low mortgage rate of 9.11% in mid-2020, sparking a credit-fueled real estate boom with 1.5 million units sold that year.

However, this momentum slowed when the Central Bank was forced to raise interest rates to curb runaway inflation. By the end of 2023, average mortgage rates had climbed to around 42%, making housing finance extremely costly. Consequently, only about 11% of property sales in 2024 were mortgage-financed—down sharply from previous years. The market is now primarily driven by cash buyers or those using developer-backed installment plans.

Several government regulations and policy shifts have also shaped the market. In 2018, Turkey lowered the minimum property investment required for citizenship from $1 million to $250,000, triggering a wave of foreign buying between 2019 and 2021. However, due to rising demand and property prices, the threshold was raised to $400,000 in mid-2022. This led to a sharp drop in foreign purchases—from a peak of 67,490 units sold to foreigners in 2022 to just 23,781 in 2024. Foreign buyers now make up only 1.6% of the market, down from 4.6% two years prior.

Other regulatory changes included raising the minimum investment required for residency (without citizenship) from $75,000 to $200,000 by late 2023, and introducing a progressive luxury housing tax in 2021 on properties valued over 5.25 million lira. These measures helped cool speculative activity and promote more sustainable growth but also contributed to reduced foreign demand in the short term.

Geopolitical factors had mixed effects. Regional instability, like the war in Syria, temporarily shook investor confidence in 2015–2016. In contrast, international crises such as the 2022 Russia-Ukraine war drove demand from affected nationals seeking safe investments and relocation. Russian buyers led the foreign market in 2024 (over 20% of foreign sales), followed by Iranians (9%) and Ukrainians (6.8%).

Additionally, the 2023 earthquake in southern Turkey raised awareness around building safety standards. Though Istanbul was not directly affected, the disaster has accelerated discussions and planning for urban renewal projects, especially replacing older buildings with modern, earthquake-resistant structures—a trend expected to drive new investment zones in Istanbul and beyond.

In summary, Turkey’s real estate market has been shaped by intertwined economic and political dynamics. Currency depreciation and inflation drove nominal price gains and attracted some foreign capital, while also introducing risk. Government policy has alternately stimulated and restricted the market. Despite these ups and downs, long-term fundamentals such as demographics and urban growth continue to support sustained demand.

Current Investment Opportunities in the Turkish Real Estate Market

Despite the challenges mentioned earlier, the Turkish real estate market still offers a wide range of attractive opportunities for foreign investors—whether in modern developments, luxury housing, or niche sectors. Below are the key highlights:

1. Large-Scale Infrastructure and Urban Development Projects

Turkey, and especially Istanbul, is undergoing major infrastructure transformations that enhance the investment appeal of surrounding areas. For instance:

  • The new Istanbul Airport, opened in 2019, is one of the largest in the world and has triggered urban development in the northern districts nearby. Investors who purchased early in areas like Arnavutköy and Başakşehir have already benefited from rising property values driven by improved transportation and services.

  • The Istanbul International Financial Center in Ataşehir (Asian side) has created a new hub for office towers and upscale residences. It is expected to attract regional businesses and boost demand for premium real estate in the area.

  • The proposed Canal Istanbul project—a planned artificial waterway parallel to the Bosphorus—remains a speculative hotspot. Although its implementation is uncertain, land prices along the expected route have already surged, presenting a high-risk, high-reward opportunity.

2. Resort Areas and Holiday Homes

Touristic regions along the Mediterranean and Aegean coasts—such as Antalya, Alanya, Bodrum, and Fethiye—present attractive options for investing in vacation properties. Turkey welcomed tens of millions of visitors in 2023, creating strong potential for short-term rental income.

With the global shift toward remote work, many foreigners now seek long-term stays in sunny, affordable destinations. This has increased demand for villas and serviced apartments. In Antalya, for example, the average gross rental yield is around 5.7% annually, often higher during the tourist season. Other cities also offer strong returns:

  • Ankara: ~8.3%

  • Izmir: ~7.1%

  • Bursa: ~7.4%

These rental yields outperform many southern and central European markets. Additionally, Turkey’s tax environment is relatively favorable for foreign landlords, with manageable property and income tax obligations under double taxation treaties.

3. Low Ownership Costs and Legal Simplicity

Property ownership in Turkey comes with reasonable acquisition and holding costs:

  • Total transaction fees (registration, taxes, etc.) are around 3–4% of the property value.

  • Annual property tax is only 0.2% in major cities.

  • Foreigners can be exempt from VAT on their first new property purchase if paid in foreign currency and held for two years.

These low costs allow for higher net returns compared to other investment destinations. Furthermore, the citizenship-by-investment program adds another layer of value for investors from countries with travel or residency restrictions.

4. Commercial, Industrial, and Logistic Real Estate

  • Office space in Istanbul could see a rebound as foreign firms return and the economy stabilizes. While current supply is high, there’s potential for growth in flexible workspaces and mixed-use business hubs.

  • Industrial and logistics properties are increasingly in demand as Turkey becomes a regional manufacturing and export center. The rise in e-commerce and nearshoring trends (bringing supply chains closer to Europe) has boosted demand for warehouses and distribution centers near Istanbul and other industrial zones.

  • Urban renewal projects, including the government-backed redevelopment of old buildings for earthquake resilience, open the door for partnerships with local developers or investments in publicly traded real estate companies.

International Comparison: Turkey vs Dubai, Spain, and Greece in Returns, Laws, and Foreign Demand

To better understand Turkey’s appeal as a real estate investment destination, it helps to compare it with other popular markets like Dubai, Spain, and Greece across several key dimensions:

1. Investment Returns (Price Growth & Rental Yields)

Turkey offers a compelling mix of capital appreciation and rental income:

  • Capital gains: Property prices nearly doubled in nominal terms between 2020 and 2022. Though real growth was lower due to inflation, long-term expectations remain positive due to strong domestic demand.

  • Rental yields: Major Turkish cities offer high gross yields of 7–8%, which is very competitive globally.

Dubai also provides high rental yields (~6–8%, reaching 9.2% in 2021). Its real estate prices rose 15–20% annually in some areas between 2021–2023 due to global capital inflows. However, Dubai’s market is historically more volatile, with clear boom-bust cycles over the past two decades.

Spain offers moderate rental returns (~4–6%) and slower, more stable capital growth. For example, average yields are around 5.6%, with price increases of a few percentage points annually. It’s a low-risk, lower-return market compared to Turkey or Dubai.

Greece has seen a revival after a decade-long slump. Yields average around 4–5%, with some strong growth since 2018, particularly in Athens. While returns are lower, prices are more stable due to being in the eurozone.

2. Legal & Regulatory Environment for Foreign Investors

All four countries allow foreign ownership, but their rules and incentives vary:

  • Turkey offers full freehold ownership and fast, transparent property registration. Foreigners are eligible for citizenship with a $400,000 investment, making it one of the most accessible "golden passport" programs globally. Taxes on purchases are moderate (~4%), and capital gains are tax-free after 5 years of ownership.

  • Spain has a "golden visa" residency program for €500,000+ real estate investment, but it doesn’t lead directly to citizenship. Property taxes and buying costs are higher (10–15% total), and rental income is taxed around 24% for non-residents.

  • Greece offered the EU’s most attractive golden visa with a €250,000 minimum investment (recently raised to €500,000 in key areas). Tax and legal processes can be slower, but ownership is secure. Total purchase costs are around 7–8%, with annual property taxes around 0.1%–0.3%.

  • Dubai is tax-free—there are no property or rental income taxes. Foreigners can own freehold properties in designated zones. Registration costs are low (around 4%), and investors can obtain long-term residency with investments as low as $200,000. However, Dubai doesn’t offer citizenship to foreign investors.

3. Foreign Demand and Market Share

  • In Turkey, foreign buyers account for a small portion of the market—only 1.6% in 2024, down from 4.6% in 2022 due to tighter citizenship requirements and currency volatility. Most buyers come from the Middle East, Russia, and Central Asia, concentrated in Istanbul, Antalya, and some coastal towns.

  • In Dubai, foreign demand dominates the market. Over 80% of buyers are non-citizens, making the city highly sensitive to global investment trends. Key buyer groups include Indians, Brits, Russians, and Chinese.

  • Spain sees foreign buyers making up 10–20% of transactions annually, especially in coastal regions and cities like Madrid and Barcelona. Northern Europeans and British nationals are the most active.

  • Greece saw a major boost from its golden visa program, with nearly 8,500 foreign applications in 2023 alone. Demand is strongest in Athens and the islands, led by investors from China, the Middle East, and the U.S.

In comparison, Turkey offers an underexploited foreign investor market—less competition, more room for negotiation, and a chance to buy into a growing market without intense bidding wars. However, this also means that foreign influence on the market is smaller, and demand cycles are driven primarily by local buyers.

Future Trends: Emerging Areas and High-Growth Sectors in Turkey’s Real Estate Market

Looking ahead, the Turkish real estate market is expected to evolve with several key trends that could shape investment opportunities in the coming years:

1. Economic Stabilization and Inflation Control

Experts agree that restoring macroeconomic stability will be crucial for revitalizing the real estate sector. With recent shifts in economic policy and the central bank’s return to high interest rates to fight inflation, forecasts suggest that inflation will gradually decline to more normal levels in 2025 and beyond.

If inflation eases and the Turkish lira stabilizes, any future price increases will likely reflect real value growth, rather than just currency devaluation. This will enhance investor confidence—both local and foreign—while reducing exchange rate uncertainty.

Although interest rates are currently high, they are expected to fall gradually once inflation is under control. This could reignite demand for mortgage-financed purchases and trigger a new growth cycle in prices and transaction volumes.

2. Rising Districts Within Istanbul

Istanbul is expected to remain the country’s real estate engine, though growth will vary between districts. Outlying and developing areas are projected to outperform the historic city center in terms of price appreciation.

  • In the European side, neighborhoods like Başakşehir and the surroundings of the new airport are seeing major infrastructure improvements and new residential complexes aimed at middle- and upper-income families.

  • On the Asian side, districts like Sancaktepe and Ümraniye, near the new financial center, are gaining appeal among white-collar workers and professionals.

  • Suburbs like Kartal and Pendik have become more attractive thanks to new metro lines that reduce commute times to central Istanbul. These areas are expected to see above-average price increases as they draw interest from the middle class.

Meanwhile, older central areas like Bakırköy, Şişli, and Kadıköy will likely remain in demand but could experience a wave of urban renewal. The municipality’s plans to redevelop aging, earthquake-prone buildings could create investment opportunities for developers involved in tear-down-and-rebuild projects.

If the Canal Istanbul megaproject is launched, it could create an entirely new urban strip, transforming Arnavutköy and Çatalca from rural outskirts to modern city zones. Though speculative, this project represents a long-term opportunity for investors willing to take on risk for potentially large rewards.

3. High-Growth Real Estate Sectors

  • Residential housing, particularly small to mid-sized apartments in well-connected locations, is expected to lead the market. With interest rates limiting budgets, affordability and accessibility will drive demand.

  • The office space sector may undergo a transformation, shifting toward flexible co-working spaces and mixed-use developments rather than traditional office towers, reflecting global work-from-home trends.

  • Logistics and industrial real estate will likely expand as Turkey grows into a regional manufacturing and trade hub. The increase in e-commerce and nearshoring strategies (relocating supply chains closer to Europe) is boosting demand for warehouses and distribution centers—especially around Istanbul and industrial cities in Anatolia.

  • Healthcare and education properties, such as private hospitals and universities, have seen rising interest from global investors as Turkey becomes a regional hub for medical tourism and higher education.

  • The hospitality sector is poised for continued growth as tourism rebounds to new record levels. Investment in hotels and condo-hotels in cities like Antalya and Bodrum could be especially lucrative.

4. Government Role and Regulation

The Turkish government is expected to maintain strong support for the construction and real estate sectors. Initiatives like mass social housing programs aim to address housing shortages and control price spikes. While not directly targeting foreign investors, these projects help drive construction activity and open indirect investment opportunities in construction firms and suppliers.

At the same time, regulation for foreign investors is likely to remain stable. After raising the citizenship and residency investment thresholds, the government may even consider offering new incentives, such as tax relief or streamlined processes, to attract more foreign capital if needed.

Additionally, following the 2023 earthquake, building safety standards are becoming a higher priority. Developers are expected to meet stricter construction regulations—raising costs slightly but boosting confidence among buyers seeking newer, safer properties.

Conclusion: Cautious Optimism for Turkey’s Real Estate Future

Despite economic challenges, Turkey’s real estate market is underpinned by strong fundamentals: a growing population, ongoing urbanization, and a strategic location that continues to attract both domestic and international investors.

Istanbul will remain the epicenter of investment, with expanding interest in cities like Bursa, Antalya, and Izmir. For foreign investors, Turkey presents a compelling opportunity to achieve high returns, diversify geographically, and benefit from potential residency or citizenship.

However, success requires a well-informed strategy that takes into account currency risk, changing regulations, and local market dynamics. As Turkey continues to open to global markets while seeking stability, foreign investors can expect a more predictable and balanced investment climate in the years ahead.