Turkey construction costs rise amid fluctuating sector confidence

Construction costs in Turkey continue to rise, impacting the real estate market and urban transformation projects. According to data from the Turkish Statistical Institute, construction costs increased by 29.59% over the last year, while labor costs rose by 31.20%. In August, the construction cost index saw a monthly increase of 2.04%, with building construction costs specifically rising by 28.94% annually.

These rising expenses, including land procurement, financing, and materials, are placing pressure on sales prices and limiting housing accessibility for low and middle-income groups, particularly in major cities like Istanbul, Ankara, and Izmir.

Concurrently, the construction sector confidence index saw a slight monthly decline, dropping from 83.1 in August to 83.0 in September 2026. While current orders increased by 1.9% to a level of 80.4, expectations for employment over the next three months fell by 2.1%, reaching 85.5. The index remains below the 100-point threshold, indicating a lack of widespread optimism despite the rise in current work volume.