Turkey Real House Prices Down 6.5% — September 2026 Bulletin

İTOSAM — Weekly Economic Bulletin | 18 September 2026

Translation and analysis of the Istanbul Chamber of Commerce economic bulletin

İTO Center for Strategic Studies — period 14 to 18 September 2026

Covered: sectoral balance sheet statistics, sectoral production indices, the house price index, house and commercial unit sales statistics, and payroll employment statistics

1. Sectoral balance sheet statistics — 2025 results

"Manufacturing still leads in asset size"

According to the 2025 sectoral balance sheet results, wholesale and retail trade ranked first in the distribution of 1.15 million firms across sectors, with 356,973 firms. The total number of firms in manufacturing was 185,933.

In the firms' aggregate balance sheet, total assets were TL 123.97 trillion, total short- and long-term liabilities TL 67.22 trillion and total equity TL 56.74 trillion. Manufacturing ranked first among all sectors with TL 33.54 trillion in assets, and wholesale and retail trade came second with TL 25.89 trillion.

According to the aggregate income statement, net profit for the period across all sectors was TL 2.23 trillion. Manufacturing had the highest net profit at TL 873.98 billion. Wholesale and retail trade earned TL 676.72 billion and construction TL 229.69 billion in net profit. Total net sales of all firms covered came to TL 107.72 trillion and total operating profit to TL 5.57 trillion.

The most important finding in this bulletin — a profit margin eroding for three years: turn these same figures into ratios and a picture emerges that the bulletin itself does not address:

Reading: the net profit margin of Turkish firms went from 3.75% in 2023 to 2.52% in 2024 and 2.08% in 2025 — in other words, it has almost halved in two years. Over the same period nominal net sales more than doubled (from TL 50.5 trillion to TL 107.7 trillion).

A more precise calculation: net sales grew 35.4% in 2025 against inflation of about 31.5% — real growth of only about 3%. But net profit grew only 11.7%, which means real profit shrank by about 15%. Firms are selling more and earning less — exactly the cost-pressure mechanism we saw in the divergence between D-PPI (Yİ-ÜFE) and CPI (TÜFE) in earlier bulletins, this time in actual financial statements.

A third point: the debt-to-equity ratio is 1.18 (TL 67.22 trillion against TL 56.74 trillion). At current interest rates, the cost of financing that leverage swallows a large part of that same 2 percent margin.

2. Sectoral production indices — July 2026

Industrial production fell 1.0% month on month and slipped 0.3% year on year. Construction output grew 1.1% month on month but fell 4.7% year on year, while services output grew 1.0% monthly and 3.0% annually. Of the three main indices, only services stayed positive on an annual basis, and the sharpest contraction is still in construction.

Within industry, manufacturing output fell 0.8% month on month but grew 0.3% year on year. The mining and quarrying index fell 2.2% monthly and 3.8% annually, and the index for the production and distribution of electricity, gas, steam and air conditioning fell 2.2% monthly and 5.6% annually. By sub-group, on an annual basis, intermediate goods output grew 1.2% and durable consumer goods 0.9%, while energy contracted 1.6%, capital goods 2.6% and non-durable consumer goods 2.0%.

A contradiction worth noting: electricity, gas and steam output fell 5.6% year on year, while the price of the same group in the producer price index rose 6.03% last month and 9.65% the month before. Falling output together with a price spike means a supply constraint, not a fall in demand — consistent with regional energy disruptions. For energy-intensive projects, this combination is the worst case.

Construction: two opposite directions in one sector

Within construction, building construction output fell 0.9% month on month and 8.0% year on year, while the construction of non-building structures jumped strongly — up 2.0% monthly and 14.0% annually. Specialised construction activities grew 1.0% monthly and fell 4.9% annually.

The gap is widening. Last month building construction was at −7.5% and non-building structures at +4.5%. Now it is −8.0% against +14.0% — the distance has gone from 12 points to 22. In a single month, the contraction in housing construction has deepened and the infrastructure boom has accelerated threefold.

The practical implication is clear: there is money in construction, but in infrastructure projects with a public-sector client — not in private housing construction. If you have delivery or partnership capacity in infrastructure (roads, utilities, industrial structures), this is the only place where the data shows double-digit growth.

A small positive: on a monthly basis all three components improved or held steady (building −0.9%, specialised +1.0%, non-building +2.0%) and the sector as a whole rose +1.1% — the first monthly growth in several months. The bottom of the cycle may be near, but it is not yet confirmed.

Services: the only growing sector

Within services, information and communication activities were the strongest sub-sector, with annual growth of 7.9%. Professional, scientific and technical activities grew 5.5%, accommodation and food services 5.3%, and transport and storage 2.8%. By contrast, real estate activities fell 5.2% and administrative and support services 3.3%.

Relative improvement in real estate: last month real estate activities were at −8.8%; now −5.2% — an improvement of 3.6 points in one month. Still negative, but the direction has changed. Likewise, accommodation and food services jumped from 1.5% to 5.3% — confirming the strength of tourism, which, as we saw in the previous bulletin, makes up half of the services surplus.

3. House price index — August 2026

The house price index rose 0.9% month on month in August and 23% year on year in nominal terms. But on the real index adjusted for consumer inflation, house prices fell 6.5% year on year. Across the three largest cities, the nominal annual change was 26.3% in Istanbul, 24.8% in Ankara and 23.3% in Izmir.

This is the most important number for your business. It is the first time in this series of bulletins that an explicit real house price figure has been published, and the figure is minus 6.5 percent. A homeowner who has seen a 23% nominal price rise over the past year has in practice lost 6.5% of the purchasing power of that asset.

Istanbul is in the best position — with 26.3% nominal growth, its real decline is about 4%, against 6.2% for Izmir and 5.1% for Ankara. This means capital still gives Istanbul priority, even though the market as a whole is eroding in real terms.

Implication for client conversations: the argument that "property in Turkey preserves value" can no longer be defended with this data — at least over a one-year horizon. The defensible argument is rental income and a multi-year horizon, not price growth. For citizenship-by-investment clients, this data should be built into expectations so that it does not turn into a dispute later.

4. House and commercial unit sales — August 2026

Total house sales across Turkey in August rose 3.1% month on month and fell 14.7% year on year, to 127,410 units. Over the same period, mortgaged sales grew 7.2% year on year and made up 17.4% of total sales. New-build sales rose 4.3% month on month and fell 4.5% year on year, to 44,378 units.

In Istanbul, total house sales fell 9.6% month on month and 16.0% year on year, to 20,426 units. Mortgaged sales grew 6.0% year on year and represented 22.1% of Istanbul's total sales. New-build sales, which make up 28.5% of Istanbul's total, came to 5,813 units — down 4.8% monthly but up 0.2% annually.

A new divergence: Turkey up, Istanbul down. While the Turkish market as a whole grew 3.1% month on month, Istanbul fell 9.6%. It is the first month in this series in which Istanbul has fallen behind the national average — and by a margin of 13 points.

Two readings are possible: (1) a seasonal effect or deferred transactions in Istanbul; (2) relative saturation of the Istanbul market compared with other cities. Separating the two needs next month's data, but if the pattern repeats next month, it means a structural change in the geography of demand.

A positive note: new-build sales in Istanbul are the only component that stayed positive year on year (+0.2%), against −16% for the Istanbul market as a whole. The new-supply advantage we saw in earlier bulletins is confirmed here too, and is even stronger.

Commercial units

In August, 17,023 commercial units were sold nationwide. According to the bulletin's text, new-build commercial unit sales rose 5.2% year on year to 4,915 units, second-hand sales fell 11.1% to 12,108 units, and mortgaged sales jumped 67.6% to 389 units. In Istanbul, 2,344 commercial units were sold, of which 20.7% were new-build and 5.2% mortgaged.

A serious inconsistency in the bulletin's table: the figures in the "2026" and "2025" columns of the commercial unit sales table do not agree with the percentage-change column — but if the two columns are swapped, every percentage comes out exactly right. On that basis, the actual August 2026 figures are probably: total sales 15,937 (−6.4%), new-build 5,172 (+5.2%), second-hand 10,765 (−11.1%), mortgaged 652 (+67.6%). The same pattern repeats for the January–August period.

In other words, the year columns in the original table have been swapped and the bulletin's narrative text quotes from the wrong column. Take care when citing these figures; the percentage changes are more reliable than the absolute numbers.

5. Payroll employment statistics — July 2026

The total number of payroll employees in industry, construction and trade-services rose 1.7% year on year in July, to 16,393,563. By sector, industry fell 1.5%, while construction rose 3.5% and trade-services 3.1%. Job losses in industry over the past year have reached 71,737.

On a monthly basis, total payroll employment was unchanged. Over the same period, trade-services employment rose 0.1%, industry fell 0.1% and construction was unchanged.

Construction lay-offs have begun. In the previous bulletin (June data), annual construction employment growth was 7.1%; in July it was 3.5% — effectively halved in a single month. Total growth also fell from 2.5% to 1.7%.

This is exactly what last month's analysis anticipated: the mismatch between a 6 percent fall in output and 7 percent growth in employment was not sustainable, and firms have started to adjust. If the trend continues, construction employment growth will reach zero or turn negative by the end of the year.

Industrial employment is still falling: from a peak of 5,106,499 (July 2024) to 4,850,893 — below the two-year average of 4,891,199. The annual loss has accelerated from 54,682 (last month) to 71,737.

6. Analytical summary

a) Real house prices have turned negative — the key number in this bulletin

Nominal growth of 23% against inflation of 31.5% means a real decline of 6.5%. Istanbul, with 26.3% nominal growth, has the best performance, but it too has seen a real decline of about 4%. This data undermines the "property as a store of value" narrative over a one-year horizon and should be taken into account in conversations with investor clients.

b) Corporate profit margins have halved

From 3.75% in 2023 to 2.08% in 2025. Nominal sales have doubled but real profit has shrunk by about 15%. With a debt-to-equity ratio of 1.18 and current interest rates, the margin for error for contracting firms is very narrow. This number is a strong argument for revisiting contract pricing.

c) Construction: housing down, infrastructure up

The gap between building construction (−8.0%) and non-building structures (+14.0%) has widened from 12 to 22 points. There is money in the sector, but in public projects. The sector's first monthly growth (+1.1%) may signal that the bottom is near — but one month of data is not enough.

d) The labour market is adjusting

Construction employment growth halved from 7.1% to 3.5%, and industrial job losses accelerated from 54.7 to 71.7 thousand. This is the six-month lag that usually passes through to housing demand.

e) Practical implications

• Set investor clients' expectations with real data. A nominal 23% looks attractive; the real −6.5% is the reality. Building the case on rental income and a three-to-five-year horizon is more durable than promising price growth.

• Focus on new-build supply in Istanbul. It is the only part of the Istanbul market that stayed positive year on year (+0.2%), against −16% for the city's market as a whole.

• Take infrastructure projects seriously. +14% annual growth and accelerating — the only area of construction with double-digit growth.

• Build the 2 percent margin into your pricing. The average Turkish firm earns only 2 lira of net profit on every 100 lira of sales. Any contract clause that transfers cost risk to you effectively puts the entire margin at risk.

• The 5.6 percent fall in electricity and gas output, together with a jump in its price, signals a supply constraint — for energy-intensive projects, both supply and price should be locked in advance.

This document is a translation and analysis of the weekly economic bulletin of the İTO Center for Strategic Studies (İTOSAM) dated 18 September 2026. Data is drawn from the sources cited in the bulletin (TÜİK and TCMB). The profit-margin calculations, the real house price figures by city, and the "Reading", "Note", "Warning", "Summary" and "Implications" sections are added commentary and are not part of the original bulletin text. Comparisons with 31.51 percent consumer inflation and references to earlier months' data are based on the bulletins of 7 August, 14 August, 28 August and 4 September 2026. One internal inconsistency in the original bulletin (the commercial unit sales table) is flagged in the text.