Last Updated on January 26, 2025 by Ideal Editor
Turkish Property Sales Rise in 2024 as Interest Rates Drop
The Turkish real estate market experienced a significant rebound, as Turkish property sales rise in 2024 due to favorable interest rate cuts and rising market demand. Residential property sales rose by 20%, driven by lower borrowing costs and increasing investor confidence. With further interest rate reductions anticipated in 2025, Turkey’s property market is poised for continued growth, making it an attractive option for both domestic and international buyers.
Residential Sales: A Strong Year of Growth as Turkish Property Sales Rise in 2024
Residential property sales reached nearly 1.48 million units in 2024, a substantial increase from 1.22 million in 2023. The surge was particularly pronounced in December, which saw 212,000 transactions—a 53% year-on-year jump. This sharp increase was largely attributed to the Central Bank of Turkey lowering its key interest rate from 50% to 47.5%, making mortgages and loans more affordable.
Newly constructed homes accounted for roughly one-third of all residential sales, slightly surpassing 2023 levels. The demand for new builds reflects buyers’ preferences for modern amenities and energy-efficient designs.
Anticipated Interest Rate Cuts in 2025
The upward trajectory in property sales could gain further momentum in 2025, as the Turkish Central Bank is expected to announce additional interest rate cuts. Lower borrowing costs are likely to attract more buyers into the market, stimulating housing demand.
Real estate economist Ahmet Büyükduman predicts that the market will continue to grow this year. “The sales trend has been rising since the second quarter of 2024, and I believe 2025 could set a new record for annual sales,” he said.
Drivers of Increased Demand
1. Attractive Investment Opportunities
With interest rates declining, savings accounts offer lower returns, prompting investors to seek alternative avenues for growth. Real estate has become a preferred investment choice due to its potential for property value appreciation and rental income.
2. Cash Buyers Entering the Market
Even cash buyers are choosing to invest in real estate, seeing it as a safer and more lucrative option. “Many cash-paying investors are banking on property values increasing in the near future,” said Büyükduman.
3. Housing Demand Despite Inflation
Despite inflation closing 2024 at 44.38%, the housing market has remained resilient. While higher demand may contribute to inflationary pressures, the appeal of owning property continues to drive transactions.
Decline in Foreign Property Purchases
While domestic sales soared, purchases by foreign buyers saw a decline, dropping by nearly a third to 23,800 units in 2024. However, December showed a 17% rise in foreign transactions, aligning with national trends.
The drop in foreign purchases can be attributed to the government’s decision to increase the minimum investment for citizenship eligibility from $250,000 to $400,000. Additionally, domestic concerns about limiting real estate sales to foreigners played a role in this decline.
Economist Büyükduman noted that foreign investment has returned to its pre-citizenship scheme level, accounting for 1.5% of total sales. “The market has normalized after a temporary surge caused by the citizenship program,” he explained.
What Lies Ahead for Turkish Real Estate?
With favorable interest rates, strong domestic demand, and a growing appetite for new builds, the Turkish property market is positioned for another year of robust growth in 2025. Although foreign purchases may stabilize at lower levels, domestic investors are expected to drive sales to new heights.
FAQs About Turkish Property Market in 2024
Why did Turkish property sales increase in 2024?
The increase was primarily due to significant interest rate cuts by the Central Bank, making borrowing more affordable. Additionally, rising demand for new builds and investor interest in real estate contributed to the growth.
What role did interest rate cuts play in boosting sales?
Interest rate cuts reduced the cost of mortgages and loans, encouraging more buyers to enter the market. Lower borrowing costs also attracted cash-paying investors looking for profitable opportunities.
Why did foreign property purchases decline in 2024?
The government raised the minimum investment required for citizenship from $250,000 to $400,000, discouraging some foreign buyers. Domestic concerns about limiting real estate sales to foreigners also played a role.
What types of properties were most popular in 2024?
Newly constructed homes accounted for one-third of total sales, reflecting buyer interest in modern, energy-efficient designs. Both domestic and foreign buyers showed a preference for residential properties.
What is the outlook for Turkish property sales in 2025?
Experts anticipate further growth due to expected interest rate cuts and strong demand from domestic investors. The market is poised to break sales records this year, according to industry forecasts.
