Turkish property prices fall in real terms despite nominal gains

In April, the residential property price index rose 26.6% in nominal terms—an impressive-sounding figure. However, Turkey's Central Bank clarifies that in real terms, adjusted for inflation, prices fell 4.3% year-on-year. This suggests that nominal growth is largely a function of inflation rather than genuine appreciation in per-square-metre values.

The picture across major cities is mixed. Istanbul recorded monthly growth of 1.6%, Ankara 2.6%, and Izmir 2.1%. Over the year, Ankara leads on nominal terms at +29.9%, while Istanbul and Izmir lag at +26.2% and +26.7% respectively.

Rental rates are climbing even faster: the rental price index jumped 31.7% in nominal terms, yet fell 0.5% in real terms. Istanbul, Ankara and Izmir posted annual rental growth of 36.2%, 36.7% and 29.4% respectively—a significant headwind for tenants.

For investors, the takeaway is straightforward: nominal growth figures can be misleading. The underlying picture is considerably less optimistic.

Source: Hurriyet Daily News Economy