Turkey housing market faces affordability crisis and shifting investment trends

Turkey is facing a significant housing affordability crisis as property prices outpace income growth. According to UN-Habitat data, it takes an average Turkish family 12.6 years of total income to purchase a home, ranking the country 134th out of 183 nations. This is notably higher than the global average of 11.2 years.

Between 2020 and 2026, average housing square meter prices rose from 3,577 TL to approximately 48,000 TL, while annual usable household income increased from 69,349 TL to 662,414 TL. This gap has led to worsening living conditions, with Research Istanbul reporting that 24% of households live in overcrowded conditions, a figure that rises to 74% among certain low-income child groups.

In the real estate market, investment decisions are shifting beyond mere price points to include financing access and rental yields. While total housing sales declined year-on-year in July, mortgage-backed sales saw a 23.7% increase, indicating that credit availability remains a critical driver for buyers. Additionally, rising costs for housing, water, and energy—which saw a 39.77% annual increase—are heavily influencing market dynamics.