Flat prices in Istanbul are rising in line with demand
PwC Turkey has conducted a comprehensive study of the local housing market. According to the study, demand for flats in Istanbul is growing rapidly, increasing the need for new properties. In order to provide housing for all, it is necessary to build at least 122 thousand flats each year.
Analysts cite demographic processes as a key factor in the increase in demand. It is expected that the population of the Turkish capital will grow to more than 16 million by 2034. At the same time, the number of households will increase by 20%. The main reason for this is a change in consumer preferences towards individual residences. Studios and one-bedroom apartments are becoming increasingly popular, particularly among young professionals and students.
However, these changes in consumer behaviour are having a negative impact on the pace of construction. Ramazan Kumova from the Association of Property Developers highlights the issues that these new trends have caused. The current regulatory framework limits developers’ ability to respond quickly to changing demand. Consequently, the rate at which housing is commissioned is slowing down, exacerbating the imbalance between supply and demand.
Overview of market trends in Turkey and Istanbul
Turkey’s property market showed rapid growth last year:
– a total volume of flats sold in Istanbul totalled more than 239,000 units;
– the volume of transactions in Turkey as a whole showed a growth of almost 21%;
– a total of 1.5 million properties were sold in 2024.
Despite high levels of activity, analysts note that construction rates remain insufficient. The optimal solution would be to adapt existing facilities to meet new market demands. However, to eliminate the deficit, urban planning norms and design standards will need to be revised.
Increased demand is pushing up housing prices. In March 2025, Turkey’s housing cost index grew by 2% compared to the previous month. On an annualised basis, the increase was over 32% — the highest since summer 2024. Meanwhile, on an inflation-adjusted basis, house prices fell by 4.2%.
Housing costs are consistently rising in the country’s three largest cities:
– Izmir recorded the most notable rise in price — by 3.8%;
– in Istanbul, the increase was 2.5%;
– in Ankara — about 2%.
Interest from foreign buyers in Turkish property has decreased. In the first quarter of 2025, they purchased just 4,578 properties — the lowest figure since 2017. The volume of such transactions decreased by almost 20% compared to the same period last year. Nevertheless, analysts expect activity to pick up in the summer months, which could be helped by the start of the holiday season.