Türkiye’s Construction Sector Shows Resilience, Though Foreign Property Sales Dip
Istanbul, Turkey – Despite global economic headwinds, Türkiye’s construction sector demonstrated continued growth in early 2026, according to recently released data from the Türkiye İstatistik Kurumu (TÜİK). Construction output rose by 8.0 percent year-on-year in January, signaling ongoing momentum in the industry. However, a notable decrease in property sales to foreign buyers suggests a potential shift in market dynamics. This complex picture of expansion alongside contraction warrants a closer look at the factors influencing Türkiye’s construction landscape, a key driver of the nation’s economic activity.
The latest figures reveal a nuanced performance across different segments of the construction sector. While overall output increased, the pace of growth varied. Building construction saw a yearly increase of 8.1 percent, while construction of structures other than buildings experienced a more substantial rise of 8.8 percent. Private sector construction activities contributed to the positive trend, increasing by 7.1 percent year-over-year. These figures indicate a broad-based expansion, though the relative strength of non-building construction is particularly noteworthy. The Turkish construction sector, representing a significant portion of the country’s GDP, is closely watched as an indicator of overall economic health.
Monthly Growth Remains Moderate
While the year-on-year growth is encouraging, the monthly data paints a more cautious picture. Construction production increased by a modest 0.9 percent in January 2026 compared to the previous month. This suggests that while the sector is still expanding, the rate of growth is slowing. A closer examination of the sub-sectors reveals further detail: building construction saw a slight decrease of 0.1 percent on a monthly basis, while construction of structures other than buildings increased by 0.8 percent. Private construction activities experienced a more significant monthly increase of 4.8 percent, potentially offsetting the slowdown in building construction.
Housing Sales Increase, Driven by Domestic Demand
Despite the global economic climate, the Turkish housing market continues to reveal resilience, particularly driven by domestic demand. TÜİK data indicates that first-time home sales across Türkiye increased by 5.9 percent in February, reaching 37,785 units. Second-hand home sales also saw a rise, increasing by 6.0 percent to 86,764 units. This brings the total number of home sales to a substantial figure, with first-time sales accounting for 30.3 percent of the market and second-hand sales making up the remaining 69.7 percent. This strong performance in the housing market is a positive sign for the construction sector, providing continued demand for new builds.
Mortgage-Backed Sales Surge
A significant driver of the increased housing sales is the surge in mortgage-backed purchases. Mortgage-backed home sales in Türkiye jumped by a substantial 42.3 percent in February, reaching 25,035 units. This indicates a growing accessibility to homeownership through financing options. Conversely, sales excluding mortgages saw a slight decrease of 0.5 percent, totaling 99,514 units. Mortgage-backed sales now represent 20.1 percent of the total housing market, while other sales account for 79.9 percent. This shift towards mortgage financing could be attributed to evolving economic conditions and government policies aimed at promoting homeownership.
Adjusted Data Confirms Underlying Trends
Analyzing seasonally and calendar-adjusted data provides a clearer picture of the underlying trends in the housing market. According to TÜİK, first-time home sales increased by 5.8 percent and second-hand home sales rose by 5.9 percent when compared to the same month in the previous year, after accounting for calendar effects. Looking at month-on-month changes, seasonally and calendar-adjusted data reveals a slight decrease of 0.2 percent in first-time home sales, while second-hand home sales increased by 2.9 percent. These adjustments help to isolate the true market dynamics, removing the influence of seasonal fluctuations and calendar variations.
Decline in Property Sales to Foreign Buyers
While the overall housing market remains robust, a notable trend is the decline in property sales to foreign buyers. In February, sales to foreigners decreased by 2.9 percent year-on-year, totaling 1,506 units. This represents 1.2 percent of all home sales during the month. Over the January-February period, sales to foreigners fell by 12.1 percent, reaching 2,812 units. This decrease could be attributed to a variety of factors, including changes in economic conditions in key source countries, shifts in Turkish government policies regarding foreign property ownership, and fluctuations in exchange rates.
The nationality of foreign buyers continues to be concentrated among specific groups. In February, Russian Federation citizens accounted for the largest share of foreign purchases, with 191 properties sold. Iranian and Iraqi nationals followed, purchasing 131 and 106 properties, respectively. This concentration highlights the importance of these markets for Türkiye’s property sector and suggests that geopolitical events and economic conditions in these countries can significantly impact demand. Türkiye İstatistik Kurumu (TÜİK) provides detailed breakdowns of these statistics.
Commercial Property Sales Show Mixed Results
The commercial property market presents a different picture than the residential sector. First-time commercial property sales in Türkiye decreased by 5.2 percent in February compared to the same month last year, totaling 3,981 units. However, second-hand commercial property sales saw a slight increase of 0.4 percent, reaching 11,088 units. Mortgage-backed commercial property sales experienced a significant surge, increasing by 62.8 percent to 692 units, while other commercial property sales decreased by 3.0 percent to 14,377 units. These figures suggest a shift in the commercial property market, with increased reliance on financing and a decline in outright purchases.
Adjusted for calendar effects, first-time commercial property sales decreased by 5.2 percent year-on-year, while second-hand sales increased by 0.4 percent. Seasonally and calendar-adjusted data reveals a slight monthly decrease of 0.4 percent in first-time commercial property sales and a 4.1 percent increase in second-hand sales. These trends suggest a complex interplay of factors influencing the commercial property market, including economic conditions, investment sentiment, and financing availability.
The Turkish construction sector, while demonstrating overall resilience, faces a complex set of challenges, and opportunities. The continued growth in construction output, coupled with a robust housing market driven by domestic demand and increased mortgage financing, provides a positive outlook. However, the decline in property sales to foreign buyers and the moderate monthly growth rates warrant careful monitoring. The interplay of these factors will likely shape the future trajectory of the sector.
Key Takeaways
- Türkiye’s construction output increased by 8.0 percent year-on-year in January 2026.
- Housing sales continue to rise, driven primarily by domestic demand and increased mortgage availability.
- Property sales to foreign buyers have decreased by 2.9 percent in February, signaling a potential shift in market dynamics.
- Commercial property sales show mixed results, with a decline in first-time sales but an increase in second-hand sales.
Looking ahead, market participants will be closely watching TÜİK’s upcoming data releases for further insights into the performance of the construction sector. The next key data point will be the March construction output and housing sales figures, expected to be released in mid-April. Stay tuned to World Today Journal for continued coverage of Türkiye’s evolving economic landscape. We encourage you to share your thoughts and insights in the comments below.
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