Turkey's Land Prices Decline Below Inflation, Only Nine Provinces See Growth

Land prices across Turkey have experienced a real decline over the past year, failing to keep pace with inflation. Data from the real estate information platform Endeksa reveals that while land prices, particularly for non-residential plots, saw a tenfold increase since January 2021, the rate of growth has slowed significantly. This trend means that the real return on land investment has weakened, with price increases falling below the Consumer Price Index (TÜFE) of 32.37% nationwide. The average land price increase across Turkey stood at 14.67% in the last year.

Only nine provinces managed to outpace inflation in land price growth. Diyarbakır and Kırşehir emerged as leaders, with price increases exceeding 60%. Hakkari, Bingöl, Uşak, Şanlıurfa, Muş, Şırnak, and Trabzon also saw land prices rise above the inflation rate. In contrast, major metropolitan areas like Istanbul, İzmir, and Ankara lagged behind. Land prices in Istanbul rose by 20.38%, İzmir by 12.61%, and Ankara by a mere 8.04% over the past year, failing to provide investors with adequate protection against inflation.

Industry representatives attribute this slowdown to the nature of land as an investment. Unlike properties that generate rental income, land does not offer a steady cash flow and is not considered a liquid asset. The current high-interest rate environment and the volatile gold market have diverted investor attention to other avenues, leading to a reduced demand for land. This shift in investment preference signifies a broader economic trend influencing real estate markets.