Turkey Holds Policy Rate at 37% for a Fifth Meeting as Real House Prices Keep Falling
The CBRT left its one-week repo rate at 37% on 10 September 2026, a fifth straight hold, while its own index shows house prices down 5.1% in real terms.
The Central Bank of the Republic of Türkiye kept its policy rate at 37% on 10 September 2026, the fifth consecutive meeting without a move since the rate was cut to that level on 23 January. The overnight lending rate stayed at 40% and the overnight borrowing rate at 35.5%. For anyone watching Turkish property, the more revealing figure landed three weeks earlier: the central bank's own residential property price index rose 25.0% over twelve months in July, and fell 5.1% once inflation is stripped out.
A hold with a tightening bias
The Committee's statement was short and unusually explicit about direction. Recent inflation figures and leading indicators, it said, suggest that the underlying trend of inflation is decelerating, but elevated energy prices driven by geopolitical developments still pose upside risks. The tight stance will be maintained until price stability is achieved, and in case of a significant and persistent deterioration in the inflation outlook, the policy stance will be tightened. Macroprudential measures remain on the table if credit and deposit markets move in unanticipated ways. The medium-term inflation target is unchanged at 5%. TurkStat put annual consumer inflation at 31.51% in August, with a monthly rise of 1.84%, in its release of 3 September.
Nominal growth, real erosion
The July reading of the TCMB residential property price index was 234.8 on a 2023=100 base, up 1.5% on the month and 25.0% on the year in nominal terms, and down 5.1% in real terms. The three largest cities diverged. Istanbul, at 222.5, rose 27.7% annually and 2.7% on the month. Ankara, at 261.3, rose 26.6% and 2.2%. Izmir, at 224.0, rose 23.1% over the year but slipped 0.5% month on month, the only monthly fall among the three. One methodological point matters when reading these numbers: the index is built from mortgage valuation appraisals rather than recorded transaction prices, so it tracks what lenders judge homes to be worth.
Three answers to one question
Glopra's market data for Turkey, from the snapshot of 7 September 2026, puts the national average at $1,076 per square metre, with a gross rental yield of 7.32%, a price-to-income ratio of 6.58, transaction costs of 8.7% and an effective non-resident rental tax of about 18.4%. Bubble Risk sits at 60, inside the elevated band. Istanbul is dearer at $1,340 per square metre and yields more, at 8.17%.
The currency is where it gets interesting. Measured in dollars, the same national market is up 6.2% over twelve months rather than 25%, because the lira lost roughly 15% against the dollar over the period. So the question of whether Turkish housing went up has three defensible answers depending on the yardstick: 25.0% in lira, minus 5.1% in real purchasing power, and 6.2% in dollars. A buyer earning in euros or dollars is exposed to all three at once.
What comes next
The summary of the September meeting is due on 17 September and the next rate decision on 22 October. With the policy rate flat and real house prices falling, the running return on Turkish residential property currently rests on rental income rather than capital growth, and on a currency that has been moving against foreign owners.
Sources: CBRT https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Announcements/Press+Releases/2026/ANO2026-38; TCMB Residential Property Price Index https://www.tcmb.gov.tr/wps/wcm/connect/8bbac42a-c854-4c58-8b0c-e7e55c35ec2d/KFE.pdf; TurkStat https://veriportali.tuik.gov.tr/Bulten/Index?p=Tuketici-Fiyat-Endeksi-Agustos-2026