Real Decline in the Housing Market and Interest Rate Expectations Created a Window of Opportunity

While the Central Bank's repo steps and falling deposit interest rate expectations are shifting balances in the real estate market, housing prices declining in real terms against inflation have initiated an early positioning period for investors.

Changing Expectations in the Markets

The formation of a 37 percent interest rate level in the Central Bank's weekly repo auctions has changed expectations in the markets. Investors accustomed to high deposit returns have turned toward alternative pursuits, and gold and real estate have begun to come to the forefront once again. The possibility of deposit returns falling could trigger a fresh influx of cash into the housing market.

Real Decline in Housing Prices

According to the CBRT July 2026 Residential Property Price Index, housing prices across Turkey increased by 25 percent in nominal terms. When adjusted for inflation, prices declined by 5.1 percent in real terms. In Istanbul, the annual increase remained at the level of 27.7 percent.

Window of Opportunity and Early Positioning

For market activity, the Central Bank does not actually need to cut interest rates; even the strengthening of the expectation of a cut is sufficient to pull demand forward. This stagnant period prior to the demand explosion that will occur when interest rates fall opens up the real window of opportunity that will yield profits for investors.

Right Real Estate Selection

When demand strengthens again, not every piece of real estate will appreciate at the same rate. Experts emphasize that new and branded projects possessing strong locations, situated along transportation axes, and with certified earthquake safety will appreciate much faster compared to older buildings.