Transformation of Turkey’s Real Estate Market from 2023 to 2024
The year 2024 marked significant transformations in Turkey’s real estate market. According to data released by TÜİK (Turkish Statistical Institute), home sales in November 2024 surged by 63.6% compared to the same period the previous year, reaching 153,014 units. However, despite this positive trend, a slight decline was observed compared to October 2024. These fluctuations reveal how seasonal factors and economic uncertainties impact the market.
Demand in Major Cities: Istanbul, Ankara, and Izmir Take the Lead
Turkey’s largest cities—Istanbul, Ankara, and Izmir—continued to dominate in real estate transactions. The strong demand in these cities highlights their ongoing appeal due to population density and investment opportunities. According to the Sahibinden report, as of October 2024, the average price per square meter reached 42,529 TL in Istanbul, 24,045 TL in Ankara, and 36,538 TL in Izmir. The annual nominal price increase rates stood at 21% in Istanbul, 26.7% in Izmir, and 24.7% in Ankara, demonstrating vibrant market activity in these regions.
A Sharp Decline in Real Prices: The Impact of Economic Dynamics
One of the most striking trends in 2024 was the continued decline in real estate prices. According to a report jointly prepared by BETAM and Sahibinden.com, real estate prices adjusted for inflation fell by 17.9% nationwide as of October 2024. Istanbul experienced an 18.5% drop, Izmir 14.8%, and Ankara 16.1%. The substantial 20% drop in real prices in Istanbul compared to the previous year stands out as a key indicator of the market’s trajectory.
(Real Price Changes of Homes for Sale Across Turkey)
(Real Estate Price Index Across Turkey)
Dramatic Increase in Mortgage-Backed Home Sales
November 2024 saw a staggering 315.7% increase in mortgage-backed home sales, with 21,804 transactions recorded. Despite this notable rise, mortgage transactions accounted for only 15% of total sales. High interest rates and the growing popularity of alternative payment methods are the primary reasons behind the limited share of mortgage transactions.
Declining Interest from Foreign Investors
Foreign investor interest in Turkey’s real estate market waned in 2024. In November, sales to foreign buyers dropped by 8.2% compared to the same month in 2023, with a total of 2,151 units sold. For the January-November period, this decline reached 35.1%. While Istanbul, Antalya, and Mersin remained the top cities for foreign investors, the overall drop in demand is a notable trend.
Shifts in Supply and Demand: Key Market Drivers
Housing supply saw a decline as of October 2024, with nationwide listings dropping by 3.2% to 789,512. Major cities like Istanbul, Ankara, and Izmir also experienced reduced supply, signaling a shift in the market’s supply-demand balance. On the demand side, a different picture emerged. The Sahibindex demand index rose by 4.5% in November 2024 compared to the previous month and recorded a 69.2% annual increase, reflecting a recovery in demand during the year’s final quarter.
(Demand index)
(Number of Listings for Sale in Turkey and the Three Largest Cities (Units))
Price Fluctuations: Signs of Stabilization?
The average housing price increase nationwide was 2.8% in November 2024. However, on an annual basis, real prices decreased by 12%. This trend may signal a search for stability in the market amidst high interest rates and inflationary pressures.
2025 Outlook: A New Search for Balance
Home sales are expected to surpass 200,000 units in December 2024, likely driven by the year-end rush to complete transactions. However, the market is anticipated to calm down and enter a more stable phase in the early months of 2025. Interest rates and inflation are poised to play a critical role in shaping price movements in the coming year.
Key Takeaways from the 2024 Real Estate Market
Turkey’s real estate market underwent significant transformations from 2023 to 2024. Economic uncertainties, seasonal impacts, and regional supply-demand dynamics reshaped the market landscape. Moving forward, stakeholders in the real estate sector must adapt their strategies to these evolving dynamics to thrive in 2025 and beyond.
References: (sahibinden.com & Betam)