Deep in the Heart of Türkiye

As the second largest city in Türkiye, Ankara has been a focal point for real estate investment for decades, due to its political significance, growing economy, and strategic location near the center of Anatolia. However, the property markets will always evolve, and even with Turkey's Golden Visa program remaining highly popular with both Russian and Ukrainian investors alike, there are economic and political uncertainties facing Turkish real estate.

Spring 2025 Marks Turkey's Worst Political Unrest Since 2016: The Political Backstory to the Present Moment

Principally, there are concerns about the high rate of Turkish lira inflation impacting construction costs, as well as whether recent nationwide protests over the arrest of a Republican People's Party (CHP in Turkish) mayor of Istanbul, Ekrem İmamoğlu, could bloom into a full fledged political crisis. President Recep Tayyip Erdoğan was also once mayor of Istanbul, from 1994 to 1998, before founding the currently ruling Justice and Development Party (AKP) in 2001. It's a testament to Turkey's relative political stability in its troubled Mideast neighborhood that it has not seen widespread political unrest in nine years, since the failed, allegedly foreign-directed coup attempt to overthrow Erdoğan, in July 2016.

Above video: Indian media outlet WION interview with Turkish political analyst and commentator Mehmet Celik on the protests over Ekrem İmamoğlu's arrest on corruption charges

Erdoğan blamed that failed coup on supporters of the exiled cleric Fethullah Gülen, who passed away in the US from natural causes this past October. In a mostly forgotten incident of tensions between NATO allies, several F16 fighter jets piloted by coup actors took off from the base and bombed the Turkish Parliament. When it became clear the plot had failed and Erdoğan (who had been warned of an imminent plot by the Russians) was alive and FaceTime-ing the Turkish media, the alleged Gulenist Air Force officers reportedly begged their confused American colleagues for political asylum inside the Incirlik Air Force Base. If the CIA was behind the Gulenist plot as many Turks (not just Erdoğan supporters) suspected, Langley apparently kept the ranking US military officers at Incirlik in the dark.

In response, the Turkish authorities temporarily shut off the electricity to a section of the base, leaving some American service men and women to sweat in the Anatolian summer heat, until the coup-plotting Turkish Air Force officers surrendered. A significant protest with hundreds of Turkish civilians formed at the Incirlik base gate, which led then candidate Donald Trump aide Paul Manafort to falsely allege that "terrorist" Turkish protesters had stormed the territory of the base. Such wildly exaggerated threats to the base during the July 2016 coup attempt later became a minor footnote during 2017 US Senate Intelligence Committee testimony supporting the post US 2016 Election Russian online influence panic and #TrumpRussia collusion hoax.

Both Washington and Moscow Need Good Relations with Ankara, Which is Bullish for the Turkish Economy

Today under President Donald Trump 2.0, Turkish-US relations appear to be improving, as even prior to the fall of Bashir al-Assad, Washington and Ankara had resolved their differences over the Syrian Kurds diverting US-supplied arms to PKK terrorists inside Turkey. The fact that Turkey's key Arab ally Qatar had also reconciled with its GCC neighbors provided a boost to Trump and Erdoğan's relationship as well. With victory over Assad and his Hezbollah allies in Syria, it appeared the Turks could return to their "Zero Problems With Neighbors" foreign policy that had been highly successful for Ankara in the late 2000s and early 2010, before the MV Mavi Marmara incident with the Israelis, the Arab Spring and the bloody Syrian Civil War complicated matters.

Turkey is also playing a constructive role in resolving the Russia-Ukraine conflict, floating the idea of deploying peacekeepers to back up a ceasefire on Ukrainian territory. Whether Moscow would make a Turkish exception to otherwise blanket Russian opposition to any NATO forces in Ukraine remains to be seen. But the U.S.-Russia détente championed by the Trump Administration over strong British and EU objections appears highly bullish for Turkey, just as it does for the Saudis and Emiratis.

Turkey remains reliant on the Turkstream gas pipeline, the Russian pumping stations for which the Ukrainians have repeatedly tried to strike in this war, and Russia is building a nuclear power complex for the Turks at Akkuyu, on the southern Mediterranean coast. Russo-Turkish tourism and trade, especially in each other's currencies, keeps growing by the billions of lira and rubles year-over-year. Growing Russia-Turkey economic ties clearly facilitated the Russians cutting a deal with Erdoğan to end Assad's reign, in return for the Turkish-installed new Syrian regime allowing Moscow to maintain a limited basing presence at Kheimmim and Tartus. Thus far, this realpolitik arrangement appears to be holding, as President Putin wrote a letter to the new Syrian leader, Ahmed Hussein al-Sharaa, offering continued cooperation.

That all being said, it's an observable fact that the opposition protests have received highly sympathetic coverage in BOTH Western and pro-Russian media. And it also does not seem to be a coincidence that Turkey's internal problems are coming to a head, now that the exuberance over Assad's ouster has worn off among many Turks. It would appear Erdoğan's policy of seeking maximum advantage for Ankara in diplomatically playing the Americans and Russians off against each other during the Syrian War may have contributed to some sympathies for his domestic opponents in both Washington and Moscow. It would also seem some Turks remain dissatisfied with the high number of Syrian refugees, which the CHP's previous candidate prior to the opposition party nominating İmamoğlu, Kemal Kılıçdaroğlu, had vowed to deport.

Photo credit above: Ankara cityscape

Uploaded to iStock by Mesut Dogan January 2024 iStock photo ID: 1827096521

The Middle to Upper Income Turkish Property Market Continues to Appreciate, Despite Sky-High Interest Rates From the Central Bank of Turkey

Returning to the state of the Turkish economy and property markets, there are several unavoidable questions: is Ankara still a viable destination for real estate investment in 2025-26? Or should investors skip the capital in favor of the most tourist-frequented Turkish coastal cities like Antalya, or even sleepier locales such as the Black Sea towns of Sinop or Trabzon (topics of our upcoming posts), far from the centers of power in Ankara and Istanbul? We will address both the circumstances surrounding real estate investment in the Turkish capital and these related TCMB monetary policy questions.

In the 2010s, the Turkish real estate market experienced significant construction booms, driven by endemic factors such as population growth and urbanization. The Turkish government added incentives for building higher end real estate, such as the Citizenship by Investment program--but nothing keeps going up forever. Sometimes, especially in real estate, you have to play the long game and accept that prices can also fall, as they did during the Global Financial Crisis (GFC) of 2008-2009.

Last spring, the Turkish central bank raised interest rates to an eye-watering 50%, one of the highest rates of any developed economy in the world, and the highest among the G20. By contrast, for those who insist the Russian economy is doomed, the Russian Central Bank, which is trying to manage an economy that's actually in wartime, has kept rates at 21%--only a few percentage points above the peak of the Paul Volcker Fed inflation fighting rates of the early 1980s USA. Turkey's northern neighbor aside, higher borrowing costs have dampened Turks' demand for mortgages. The country also faces economic uncertainty due to currency depreciation, which drives many Turks into investing in liquid assets like Bitcoin or gold, rather than property. So some people will naturally become cautious over committing to long term or illiquid real estate investments. The market saturation is also quite high in several cities, including Istanbul, where the rapid pace of construction led to an oversupply of properties, as well as downward pressure on property prices.

Another uncertainty facing the Turkish real estate market is the potential for government austerity measures to combat inflation after Erdoğan steps down as president. The central bank's 5% rate increase came a few months after Erdoğan's re-election. We don't know who the 71-year-old's successor will be, we just know a new administration could bring changes. We don't know which way the central bank will pivot, and it isn't clear if they themselves know whether they plan to reduce or slightly raise rates. But given that there's not a lot of room left to increase interest rates, Ankara could pivot to tighter fiscal policies for stabilizing the economy, while simultaneously making modest rate cuts. It could also raise the cost of existing real estate investor incentives, such as the Citizenship by Investment (CIP) program. In 2025, the minimum investment into property to qualify for the Turkish Golden Visa and pathway to citizenship is still $400,000, but this is likely to increase in 2026 or 2027.

Amid Present Uncertainties, Look to Longer-Term Fundamentals of Turkish Properties

International investors are, understandably, wary of the political uncertainty facing the Turkish government. But all of this is mostly about the short-term over the next year or two, not the long term. And this is not just my personal opinion, but that of my ESW Editor-in-Chief, that the long-term fundamentals in Turkey remain strong. This is primarily due not just to Turkey facing fewer demographic headwinds than its European neighbors, but also the major Turkish role linking Eurasian East-West and North-South trade. Despite all of the recent FUD listed above, the real estate market in Ankara has shown resilience, and this is due to a few factors. One of which is the most obvious, it's the political and administrative center of Turkey, so it benefits from stable demand for housing and office space from government employees, international organizations and foreign diplomatic missions. And since Ankara remains relatively affordable compared to the even larger and more cosmopolitan Istanbul, it will remain an attractive option for investors.

The Syrian Refugees Returning Home Factor in Gentrifying Previously Lower-Income Areas

Due to the PKK separatist threat, public support for Turkey's extensive involvement to the point of establishing a new client regime in Syria, as well as the Turkish Army's incursions into northern Iraq, has remained strong. For the past twelve years, Ankara has been home to a significant population of Syrian refugees, many of whom have settled in neighborhoods such as Altındağ and Keçiören.

Given that many CHP politicians like the aforementioned Kılıçdaroğlu have expressed concerns about crime, especially narcotics trafficking, as well as a higher poverty rate in the country associated with the Syrian influx, Turkish policy has encouraged Syrians to return to their homeland. However, Ankara may also implement policies that encourage integration or provide incentives for development, depending on how many Syrians will go back this year.

Some of the more prosperous Syrians who sold assets before leaving purchased properties, but the majority of refugees have been renters. With the collapse of the previous Syrian government on December 8, 2024, many Syrians have chosen to return. As a matter of fact, 115,000 Syrians from Turkey have already entered Syria over the past two months. Any reduced pressure on Ankara rents, however, has yet to be noticed by locals or the media.

Nonetheless, if the trend of Syrians returning to their home towns continues, it may reduce demand in certain areas, and the reduction of demand will mostly apply to lower-to-moderate income rental properties where Syrians are concentrated. Lower rental yields in turn, would lead to slower price growth in these areas, but the Syrians' departure could also create opportunities for gentrification. Areas that were previously dominated by low-income housing could be redeveloped into modern apartment complexes with 21st-century amenities, attracting higher-income foreigners as well as domestic tenants.

The Best Areas of Ankara for Property Appreciation in 2025-26

Overall, investing in Ankara 2025-26 remains viable, there is stable demand, affordable prices, and significant infrastructure investments in recent years that reiterated the importance of the capital to the Turkish state. These include the expansion of the metro system and the development of new commercial and residential projects, there is also a small potential for tourism – it is not a tourist destination, but there are historical sites such as the Anıtkabir mausoleum and the Museum of Anatolian Civilizations, if developed correctly, there is the potential to attract more visitors. This could drive demand for short-term rental properties and hospitality developments.

Key neighborhoods for investments include the Upscale district of Cankaya , which is home to most of the administrative functions and embassies, Yenimanhalle, which is known for its green spaces and middle-income apartment buildings, other residential and commercial districts include the mid to high rise suburbs of Keçiören and Etimesgut. Sincan is an industrial district and is populated by the working class, but still has some nice parks.

It's definitely advisable to watch this space and stay informed about the political and economic developments in Turkey while planning your next movies. And while the short term may be challenging, the long-term fundamentals in Ankara remain, so it's not going to be “wrong” to invest in the Turkish capital for the long term. Ankara, in 2024, recorded 134,046 property sales and property prices in the city center of Ankara rose by 12%, so high interest rates or not, it's going strong.