When Interest Rates Fall: Turkey’s Real Estate Reawakens in 2026

Market Outlook

After two challenging years marked by high inflation and tight monetary policy, analysts expect Turkey’s real estate market to regain momentum in 2026. With the Central Bank’s policy rate projected to drop below 30%, funds parked in high-yield savings accounts are likely to shift once again into property — historically one of the country’s favorite inflation hedges.

As liquidity improves and financing conditions ease, the demand for quality housing is expected to increase across Istanbul, Antalya, İzmir and major coastal regions, while rental yields will remain attractive due to ongoing urban migration and limited new supply.

Key Insights for 2026

• Interest-rate easing: Gradual reduction in rates encourages renewed borrowing and investment appetite.
• Deposit rotation: Investors move capital from fixed-term accounts to tangible assets like real estate.
• Supply pressure: Construction slowdown in 2024–25 may cause inventory shortages by late 2026.
• Foreign buyers: A weaker lira and improved stability make Turkey even more appealing to overseas investors.

What We Expect If Policy Rates Slide Under 30%

1) Deposit → Property Rotation

Cash-rich households re-enter the real estate market seeking stronger long-term value protection.

2) Mortgage Market Recovery

Lower interest rates help unlock pent-up demand from middle-income buyers who were priced out earlier.

3) Price Stabilization

Nominal price growth aligns closer with inflation, helping restore confidence and valuation clarity.

4) Investor Re-entry

Domestic and foreign investors return to projects with high liquidity, amenities, and rental potential.

Investor Tip

If your strategy depends on falling interest rates, pre-position early. Prices tend to move ahead of official rate cuts. Focus on energy-efficient projects and prime coastal areas where long-term demand is resilient.

Related Reading

Curious why sea-view properties in Istanbul maintain stronger value over time? They combine lifestyle appeal with tourism demand — an angle that may once again prove highly profitable as liquidity returns to the market.