House prices index surges by 2.1% in October, central bank reports

The Residential Property Price Index (RPPI) for Türkiye recorded a 2.1% increase in October compared to the previous month, reaching 151.1 on a 2023=100 reference scale, according to data released by the Central Bank of the Republic of Türkiye (CBRT).

While the RPPI showed a nominal annual increase of 26.8%, it reflected a 14.7% decline in real values after adjusting for inflation. The index measures quality-adjusted price changes in dwellings and provides a comprehensive view of the real estate market in Türkiye.

Regional variations in major cities

Significant regional differences were noted in the RPPI’s performance. In October, monthly increases were observed at 1.1% in Istanbul, 2.8% in Ankara and 4.5% in Izmir.

Annual growth in nominal terms stood at 21.2% for Istanbul, 32.5% for Ankara and 28.7% for Izmir, indicating a robust upward trend in the latter two cities.

The Residential Property Price Index measures quality-adjusted price changes in dwellings across Türkiye by CBRT to provide an overview of the real estate market.

Decrease in real prices reflected house sales growth

House sales demonstrated notable growth affected by real price degradation, as indicated in CBRT data. According to Turkish Statistical Institute (TurkStat) data released last Thursday, total house sales in Türkiye rose by 2.8% month-on-month in October.

From January to October, sales increased by 11.9% year-on-year, reaching 1.11 million units.

First-hand home sales surged 97.3% in Oct, totaling 57,679 units and accounting for 34.9% of all transactions. Over the first 10 months of 2024, sales of new properties rose by 20.4%, amounting to 358,558 units.

The contrasting trends between nominal and real property prices reflect ongoing challenges from inflationary pressures on the real estate sector, while highlighting continued demand for the housing market.