Who’s Buying Homes in Türkiye: Slowing Foreign Investment

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Türkiye’s housing market continues to expand, but foreign interest has clearly weakened. According to TÜİK, 150,657 properties were sold in September 2025 — up 6.9% year-on-year. Sales to foreign nationals fell 12.6%, with their share dropping to 1.2% of total transactions.



Istanbul once again led the monthly tally with 24,119 sales, followed by Ankara (13,417) and Izmir (8,544). The lowest figures were recorded in smaller provinces: Ardahan (70), Bayburt (117) and Tunceli (142). For January–September, contracts were signed for 1.1 million properties — 19.2% more than a year earlier.

Growth is driven primarily by mortgage transactions, which rose 34.4% month-on-month and 76% year-to-date. In September, 21,266 units were purchased with loans (14.1% of all sales). Cash/non-mortgage deals grew at a milder 3.4% to 129,391 units, yet they still accounted for the bulk of the market (85.9%).



New-builds made up 31.3% of sales — 47,117 homes (+5%). The secondary market grew faster: 103,540 deals in September (+7.8%), and over 786,000 in nine months (+21.6%).



Sales to foreigners remain at a three-year low. September saw 1,867 such transactions, down 7.7% year-on-year. Nearly half were in Istanbul (744), plus 557 in Antalya and 124 in Mersin.



Top buyers: Russia (267), Iran (202) and Iraq (146). From January to September, foreigners bought 14,944 properties versus 17,095 a year earlier (–12.6%). The drop reflects visa-rule changes, currency shifts and a pivot toward domestic purchasers using real estate to hedge inflation.



Inflation is slowing but remains a central challenge. Two years ago it peaked near 59%; last year it was 51.97%; in August 2025 — 32.95%. Monthly prints also eased: 9.09% and 2.47% down to 2.04%. Yet slower pace ≠ relief: price pressure persists across categories and real incomes continue to erode. The central bank expected year-end inflation at 25–29%, but even that looks optimistic.



Food prices rose 33.28%. Given households’ high spending on rent and food, the inflation mix hits hard: real incomes shrink and effective housing demand is capped. The PPI climbed 25.2% y/y and 2.5% m/m. Over half of the increase came from food and utilities, implying persistent cost-push pressure.

In August, housing prices in lira rose 53.27% y/y and added 8.12 pp to the overall index, but declined in FX terms. For instance, Istanbul’s average price fell from $1,879/sq m (Q2 2023) to $1,613/sq m (Q4 2024), –14.1%. Nationwide the drop was –9.6% — from $1,157 to $1,046/sq m. The Central Bank of Türkiye recorded four straight months of dollar-price declines, while lira depreciation turns nominal TRY gains into real asset devaluation. For foreign investors, that means loss of capitalization even when the sticker price “rises.”

Why the divergence?

FX depreciation: TRY weakness against USD/EUR makes lira assets cheaper in hard currency; even +20–30% in TRY can mean a dollar decline.

Tight financing: with high rates, developers more often offer cash discounts and installments, lowering the FX deal price.

Household budgets: a larger share goes to essentials (food, transport, utilities), leaving less for home purchases amid limited mortgage programs — liquidity thins and sensitivity to macro swings grows.

A key turning point came on 23 August 2025, when the central bank ended FX-protected deposits (KKM). For years, KKM partially offset lira depreciation on bank deposits, creating an illusion of stability. With that protection gone, FX risk is fully back. For foreign participants — especially those using the deposit route under the CBI (citizenship-by-investment) program — this implies direct losses. According to CIP Turkey consultants, the FX value of such deposits may have shrunk by 50%+.



Economist Aran Hoker notes that even seasoned investors underestimated the scale. In one example, with a two-year protection in a three-year contract, the lira could halve overnight, and those losses were impossible to hedge. The pattern is clear: for many, the market shifted from capital preservation to FX exposure.

Falling USD/EUR prices mean assets are losing ground against the global yardstick. In this setting, the market is attractive mainly to lira-based buyers — i.e., local citizens rather than foreign investors, many of whom are also at risk of citizenship revocations.