08.10.2026

Everyone is talking about inflation in Turkey today: experts on social media, journalists and even the neighbors outside your building. But almost no one explains how it actually affects real estate. And even fewer people know that for an investor buying property in Turkey, inflation more often works in their favor than against them. In this article, I explain why this happens and show it with 2026 figures.

Inflation in Turkey is falling: from a peak of about 75% in 2024 to 31.5% in August 2026.

Real estate is growing faster than the dollar exchange rate: over the year, housing prices in lira rose by 23%, the dollar by 17.7%, for a net result of +4.5% in US dollars.

Construction is getting more expensive: construction costs rose by 28% over the year, so developers cannot lower prices.

Rents are growing faster than in Europe: rents in Istanbul rose 14.3% in US dollars over the year, compared with about 3% on average in the EU.

Inflation is protected by law: rent for existing tenants is indexed to average annual inflation.

Inflation in Turkey is real, and I will not pretend it does not exist. According to TÜİK, prices rose by 31.51% year over year in August 2026. Groceries, utilities and cafe and restaurant services have become more expensive.

But it is important to understand three things.

First: inflation is falling. In May 2024, it reached about 75%. Today it is more than two times lower. Market participants expect annual inflation to be around 23.7% in 12 months.

Second: prices have risen all over the world. If you have gone to a store in any country over the last five years, you have seen it. In many countries, official inflation and what people see on price tags differ noticeably. Turkey does not hide its inflation: the figures are published every month, and the market immediately factors them into prices.

Third, and most important: an investor does not choose a country by the price of meat. They choose a country where their asset grows. Inflation affects your supermarket bill, but if you live in another country and own an apartment in Turkey, you care about something else entirely: whether the property value and rent are growing in US dollars.

When the lira weakens, Turks do what people all over the world do in this situation: they move their savings into real assets. An apartment does not lose value along with the currency. That is exactly why 98.5% of property buyers in Turkey are Turks themselves, and mortgage transactions grew by 27.6% in January-August 2026.

For you as an investor, this means constant domestic demand. As long as there is inflation, Turks have a reason to buy apartments.

Many people think that real estate in Turkey only grows in lira and stands still in US dollars. The numbers say otherwise. Over the year from August 2025 to August 2026:

Housing prices are outpacing the exchange rate. An apartment owner in Turkey does not lose money but earns in US dollars, even with high inflation.

This is an argument that is hardly ever mentioned.

According to TÜİK, in July 2026 construction costs rose by 28.33% year over year: materials became 27.13% more expensive and construction labor 30.51% more expensive. In US dollars, that is about +9% over the year.

What this means in practice:

By buying a property today, you lock in a price that no one will repeat tomorrow: the next new building nearby will be built at a new, higher cost.

For an investor buying an apartment to rent out, inflation in Turkey is perhaps the main ally.

According to the Central Bank of Turkey, over the year rents for new tenants rose by 26.4% nationwide and by 34.5% in Istanbul. In US dollars, that is +7.4% across Turkey and +14.3% in Istanbul.

For comparison: in the European Union, rents rose by an average of 3.0% year over year in the first quarter of 2026. Rents in Istanbul are growing in US dollars several times faster than the European average.

Protection by law. Even for existing tenants, rent in Turkey can be raised by the average inflation over 12 months. In August 2026, this figure was 31.79%. In other words, inflation is literally built into your rental income: the higher the inflation, the larger the legal rent increase.

Another consequence of inflation that we see every season: Turkey is no longer the cheapest resort destination. Tourists who came for the cheapest "all-inclusive" deal are gradually moving to other countries. They are being replaced by affluent tourists for whom quality matters more than price.

The statistics show this. In April 2026, occupancy at five-star hotels in Turkey was 41.9%, at four-star hotels 38.9%, and at three-star hotels 34.2%. The premium segment holds demand better than the budget one. In summer, hotel occupancy in Antalya reached 90-100%.

And at the very top of the market, the picture is even more striking. I see it with my own eyes every year: the best hotels on the Antalya and Bodrum coast, such as Maxx Royal, Cullinan, Lujo, Mandarin Oriental and Kempinski, are fully booked in season, even though a suite or villa there costs from $1,000 to $5,000 or more per night. Booking a room a week or two before a high-season trip is practically impossible.

An honest look at the risks:

If you buy a new build in installments and the contract payments are fixed in lira without indexation, inflation works in your favor: each subsequent payment is worth less in real terms than the previous one. Before signing the contract, it is important to check the payment currency and the indexation terms. We do this for every Client.

Inflation in Turkey is declining. Interest rates will follow, which means mortgages will become cheaper, and millions of local buyers who are putting off a purchase today will enter the market. When that happens, the best properties will be the first to rise in price.

Right now, investors are buying real estate while mortgages are still expensive and competition for the best units is lower. This is the window to enter the market.

In August 2026, annual inflation according to TÜİK was 31.51%. That is more than half the 2024 peak, and the market expects it to fall further.

Yes, if you buy a liquid property. Over the year, housing prices in Turkey rose by 4.5% in US dollars, by 7.3% in Istanbul, and rents in Istanbul rose by 14.3% in US dollars.

No. Housing prices are rising faster than the lira is losing value. Over the past year, price growth in lira (+23%) outpaced the rise of the US dollar (+17.7%).

Because construction costs are rising: they went up 28% over the year. A developer cannot sell below cost.

Rents rise together with inflation. For new tenants, rent is set at market rates, and for existing tenants it is legally raised by the average inflation over 12 months.

In US dollars or euros. That way you see the real return without the effect of the lira exchange rate.

Inflation in Turkey is real, and it is noticeable for those who live on lira. But for an investor it works differently: construction gets more expensive, new-build prices rise, the resale market follows them, and rents are indexed in line with inflation. Real estate in Turkey is growing in US dollars today, and rent growth in Istanbul is several times faster than in Europe.

An investor does not choose a country where groceries are cheaper. They choose a country where their asset grows. By this criterion, Turkey is one of the strongest markets today.

At DDA Real Estate Turkey, we select liquid properties for our Clients that benefit from inflation rather than suffer from it, and we calculate returns in US dollars from day one.

About the author. Sergei Dubinets, founder and CEO of DDA Real Estate Turkey. He has been working in the Turkish real estate market since 2020 and is a licensed professional. The Company has offices in Istanbul and Antalya.