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Turkey's upcoming elections are creating significant uncertainty for property investors as political tensions escalate and the lira continues to weaken against major currencies.
The Turkish real estate market faces unprecedented volatility with domestic property prices rising over 20% nominally in 2025, while foreign investment has cooled due to higher citizenship investment thresholds and political risks. President Erdoğan's government continues to centralize power through opposition crackdowns, including the March 2025 arrest of Istanbul Mayor Ekrem İmamoğlu, which triggered both market disruptions and widespread protests.
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Turkey's political instability and economic volatility make property investment timing crucial, with the lira hitting record lows around 41 per USD and inflation approaching 40% annually.
While domestic demand supports moderate price growth in major cities like Istanbul, foreign buyers face significant currency risk and policy uncertainty ahead of elections.
| Factor | Current Status (September 2025) | Post-Election Outlook |
|---|---|---|
| Political Stability | High tension, opposition crackdowns | Possible change if opposition unifies |
| Property Prices | +20-30% nominal, declining real value | 5-10% growth in Istanbul if stable |
| Inflation Rate | 39-40% annually | Gradual easing expected |
| Interest Rates | 46% emergency levels | Remain high short-term |
| USD/TRY Rate | ~41 (record lows) | High volatility continues |
| Foreign Investment | Significantly reduced | Depends on policy stability |
| Economic Growth | 2.6% projected for 2025 | Modest improvement possible |
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Laurence Rapp 🇬🇧
Sales representative at Spot Blue - International Real Estate Agency
What is Turkey's current political situation as of September 2025?
Turkey faces severe political instability with President Erdoğan's AKP party intensifying crackdowns on opposition figures and centralizing power.
The most significant recent development was the arrest of Istanbul Mayor Ekrem İmamoğlu in March 2025, which triggered widespread protests and market volatility. The ruling party continues to pressure opposition movements, particularly targeting the CHP party that controls major urban centers including Istanbul and Ankara.
Political tensions have escalated throughout 2025 as the government uses judicial and administrative tools to weaken opposition leadership. The opposition faces internal divisions while trying to maintain unity against increasing government pressure. This creates an environment of uncertainty that directly impacts investor confidence and market stability.
As of September 2025, the political climate remains highly volatile with frequent protests and continued arrests of opposition figures, making it difficult for both domestic and foreign investors to predict policy directions.
How likely is significant political change after the upcoming elections?
Significant political change is possible but faces substantial obstacles due to Erdoğan's control over state resources and institutions.
The opposition CHP party maintains strong support in urban areas and could potentially gain parliamentary seats if they maintain unity and convert urban popularity into broader electoral success. However, the ruling AKP retains significant advantages through control of media, judiciary, and administrative apparatus.
Electoral outcomes will heavily depend on the opposition's ability to overcome internal divisions and present a unified front against the incumbent government. The government's use of arrests and legal pressure against opposition leaders creates additional challenges for electoral competition.
International observers note that while change is theoretically possible, the concentration of power and resources in favor of the ruling party makes dramatic shifts unlikely without unprecedented voter mobilization.
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What specific impact will the elections have on Turkey's real estate market?
Elections will create short-term volatility in the Turkish property market with potential for both opportunities and significant risks.
| Election Scenario | Market Impact | Timeline |
|---|---|---|
| Government Victory | Continued current policies, gradual price growth | Immediate stability, 5-10% price increases |
| Opposition Victory | Policy uncertainty, potential reform program | 3-6 months volatility, then stabilization |
| Contested Results | Severe market disruption, capital flight | 6-12 months instability |
| Pre-Election Period | Reduced foreign investment, currency volatility | Current through election date |
| Post-Election Clarity | Potential investment surge if stability returns | 3-6 months after results |
Is there historical evidence of political instability affecting Turkey's economy during elections?
Turkey has a documented history of political instability severely impacting economic conditions and property markets during election periods.
Previous election cycles have consistently produced currency depreciation, stock market volatility, and reduced foreign investment flows. The 2018 elections saw the lira lose over 25% of its value, while the 2023 elections created similar market disruptions with property investment declining by approximately 40% in the months surrounding the vote.
Major political events regularly trigger capital flight, with foreign investors reducing exposure to Turkish assets during periods of uncertainty. The arrest of opposition figures, such as the March 2025 detention of Mayor İmamoğlu, immediately caused lira depreciation and increased government borrowing costs.
Historical patterns show that property markets typically experience 15-30% volatility in transaction volumes during election years, with foreign buyer activity particularly sensitive to political developments. Recovery typically takes 6-12 months after political clarity emerges.
How do Turkey's current economic conditions look in September 2025?
Turkey's economy faces severe challenges with inflation approaching 40% annually and interest rates at emergency levels near 46%.
- Inflation Crisis: Consumer prices are rising at 39-40% annually, eroding purchasing power and making long-term planning difficult for property investors
- Currency Weakness: The Turkish lira has hit record lows around 41 per USD, creating significant volatility for foreign currency transactions
- High Interest Rates: The central bank maintains rates near 46% to combat inflation and support the currency, making financing extremely expensive
- Reduced Growth: Economic growth is projected at only 2.6% for 2025, down from 3.2% in 2024, indicating economic weakness
- Fragile Confidence: Investor sentiment remains negative due to policy uncertainty and political instability
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What are predictions for inflation and interest rates after the elections?
Economic forecasts suggest gradual inflation reduction over the next 12 months, but this depends heavily on post-election policy credibility and political stability.
The government plans to announce a medium-term economic program focused on reducing inflation to more manageable levels, potentially targeting 15-20% by late 2026. However, success requires consistent policy implementation and restored investor confidence, both dependent on election outcomes.
Interest rates are expected to remain elevated in the short term, with the central bank likely maintaining rates above 40% through early 2026 to support currency stability. Any rapid rate reductions could trigger further lira depreciation and undermine inflation control efforts.
Credible economic reforms following elections could allow gradual rate reductions starting in mid-2026, but this scenario requires political stability and consistent policy implementation. Market analysts remain skeptical about Turkey's ability to achieve rapid economic stabilization given ongoing structural challenges.
Are major policy changes expected that could impact property prices?
Several potential policy shifts could significantly affect Turkey's residential property market depending on election outcomes.
The government may adjust citizenship investment thresholds, which currently require minimum property purchases of $400,000 for foreign investors seeking Turkish citizenship. Changes to this program could either boost or reduce foreign demand depending on whether thresholds are raised or lowered.
Infrastructure spending policies will directly impact regional property values, with major projects in Istanbul, Ankara, and coastal areas potentially driving local price increases. However, budget constraints may limit the scope of new developments.
Residency permit requirements for property owners could be modified, affecting foreign buyer interest and long-term demand patterns. Tax policies on property transactions and ownership may also face revision as the government seeks additional revenue sources.
It's something we develop in our Turkey property pack.
How does the foreign exchange rate affect potential property purchases?
Extreme lira volatility creates both significant opportunities and substantial risks for foreign property buyers in Turkey.
With the lira at record lows around 41 per USD as of September 2025, foreign buyers can purchase Turkish properties at historically low prices in dollar terms. A property costing 4 million lira costs approximately $97,500 USD, compared to $160,000 when the lira was at 25 per dollar in early 2024.
However, currency volatility introduces timing risk where delayed purchases could become significantly more expensive if the lira strengthens, while immediate purchases risk further depreciation reducing property values in foreign currency terms.
Transaction timing becomes crucial as daily lira fluctuations of 2-5% are common, potentially affecting purchase costs by thousands of dollars. Foreign buyers need hedging strategies or must be prepared for substantial currency risk throughout the purchase process.
Rental income calculations also become complex as domestic rental yields in lira may not translate to stable foreign currency returns due to ongoing devaluation trends.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Turkey versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What is the current demand for real estate in major Turkish cities?
Domestic demand for residential property remains robust across major Turkish cities, supporting price growth despite economic challenges.
Istanbul residential sales increased by over 25% in the first half of 2025 compared to the same period in 2024, driven by domestic buyers seeking inflation hedges. The city's luxury apartment market in areas like Beşiktaş and Şişli shows particular strength with prices rising 30-35% nominally.
Ankara's government district properties attract steady demand from civil servants and professionals, with moderate price increases of 15-20% annually. Coastal areas including Antalya and Bodrum see strong domestic tourism-related investment, though foreign buyer activity has decreased significantly.
Foreign demand has cooled substantially, with international property purchases down approximately 60% in 2025 compared to 2023 levels. This decline stems from higher citizenship investment thresholds, political uncertainty, and currency volatility concerns among foreign investors.
New construction activity continues in major urban areas, supported by government infrastructure projects, though financing costs limit development pace and project scope.
Are property prices expected to rise or fall after the elections?
Property prices in major Turkish cities are likely to see modest increases of 5-10% in 2026 if political stability emerges post-elections.
Istanbul residential market analysts project continued nominal price growth driven by domestic demand and ongoing inflation, though real price growth may remain limited. Infrastructure investments in areas like the new Istanbul Airport corridor could drive local price increases of 15-20%.
However, prices adjusted for inflation have already declined in 2025, meaning nominal increases may not represent real value gains for investors. Foreign buyers face additional currency risk that could offset any property value appreciation.
Regional variations will be significant, with coastal tourism areas potentially experiencing different trends than urban commercial centers. Government policy changes regarding foreign investment could create sudden shifts in certain market segments.
The timeline for price movements depends heavily on how quickly political and economic stability return after elections, with potential for both rapid growth or continued stagnation based on policy outcomes.
How should election timing align with your financial goals?
Election timing creates both risks and opportunities that must be carefully evaluated against your specific investment timeline and risk tolerance.
Pre-election purchases offer potential currency advantages with the lira at historic lows, but carry risks of further political instability and policy uncertainty. Buyers with long-term investment horizons (5+ years) may benefit from current low entry prices despite short-term volatility.
Post-election purchases allow for greater policy clarity but may face higher prices if stability returns and demand increases rapidly. The window for post-election opportunities typically lasts 3-6 months before prices adjust to new market conditions.
Financing considerations are crucial as Turkish lira loans carry interest rates near 46%, while foreign currency financing introduces additional exchange rate risk. Cash purchases provide more flexibility but require careful timing to optimize currency conversion.
Risk management strategies should include currency hedging, flexible closing timelines, and contingency planning for various political scenarios to protect against adverse market movements.
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What external factors could influence Turkey's real estate market?
Global economic conditions and international relations significantly impact Turkey's property market beyond domestic political considerations.
- European Union Relations: Ongoing tensions with EU members affect foreign investment flows and potential sanctions that could disrupt property transactions
- Regional Stability: Conflicts in neighboring Syria and Iraq influence refugee flows and regional security concerns affecting property demand
- Global Interest Rates: Federal Reserve and ECB policy changes affect international capital flows and foreign investor appetite for Turkish assets
- Energy Prices: Turkey's dependence on energy imports makes property markets sensitive to oil and gas price volatility
- International Sanctions: Potential Western sanctions related to foreign policy positions could severely restrict foreign investment and financing options
Should you wait for market stabilization or buy now before potential price changes?
The decision depends on your risk tolerance, investment timeline, and ability to manage currency and political risks effectively.
Buying now offers advantages of historic lira weakness, potentially lower competition from foreign buyers, and access to properties before any post-election price increases. However, this strategy requires accepting substantial political and currency risk with no guarantee of near-term stability.
Waiting for post-election clarity reduces political risk and allows for better assessment of policy directions, but may result in higher purchase prices and increased competition if stability returns. The optimal waiting period is typically 3-6 months after election results for policy directions to become clear.
Conservative investors should wait for greater stability, while aggressive investors with strong risk management capabilities may find current conditions attractive for long-term positions. Currency hedging strategies become essential regardless of timing choice.
Market conditions suggest that timing flexibility provides the greatest advantage, allowing buyers to respond quickly to either stability or continued volatility based on election outcomes and subsequent policy developments.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Turkey's property market faces unprecedented challenges as political tensions escalate and economic volatility continues through the election period.
Success in Turkish real estate investment requires careful timing, robust risk management, and thorough understanding of both domestic political dynamics and international economic factors affecting market conditions.
Sources
- IRIS France - Turkey: A Shifting Political Landscape
- Reuters - Turkey's Latest Legal Crackdown Hits Opposition Markets
- CNBC - Political and Financial Turmoil Dominates Turkey
- OSW - Turbulent Stabilization: Turkey's Economy
- Skyline Holding - Turkey Real Estate Forecast 2025
- Modern Diplomacy - A Market in Motion: Turkey Real Estate
- Emlak Platform - Turkey Real Estate Market Analysis 2025
- Reuters - Turkey Medium-Term Economic Programme