Currency Risk: USD vs TRY for Turkish Property Investors in 2026

A foreign buyer purchasing in Istanbul today is, whether they realise it or not, taking on three currency positions simultaneously: USD on entry, TRY across the operating life, and back to USD at exit. The interaction between those positions has done more to determine after-tax returns on Turkish property over the past five years than any other single factor. Understanding it — and understanding why the Turkish citizenship-by-investment programme actually offers a structural hedge against the worst of it — is the difference between a sound 2026 investment thesis and a story you will regret telling later.

The five-year context

In June 2021, one US dollar bought you about 8.5 Turkish lira. By June 2024, that same dollar bought roughly 32 lira. The trajectory is not a glitch; it reflects a sustained loosening of Turkish monetary policy through 2022–2023 followed by a hawkish reset under Governor Hafize Gaye Erkan and her successor. Inflation peaked in late 2022 above 85% and remained elevated through 2024.

For a Turkish property investor, this means the same lira-denominated apartment purchased in mid-2021 for TRY 4 million (then USD 470,000) is today nominally worth TRY 16 million — yet that lira value, converted back to dollars, is USD 500,000. A 2% USD nominal return over three years on what would have looked, in lira terms, like a fourfold gain.

This is the asymmetry that defines Turkish property economics.

How the Turkish CBI structure flips the asymmetry

The Turkish citizenship-by-investment programme requires, under Central Bank regulations effective since 2022, that the purchase price is paid in foreign currency through a Turkish bank, converted to TRY at the official rate, and the valuation is fixed in USD at the USD 400,000 threshold.

This is a critical structural feature. It means that:

• The buyer's entry cost is dollarised — not exposed to TRY drift between contract signing and closing.
• The legal property valuation that satisfies the citizenship threshold is dollarised — the buyer is buying USD 400,000 of real estate, not a TRY equivalent that might melt.
• Developers pricing for the CBI market quote in USD and only convert at the closing window — pricing transparency that does not exist in the local market.

For a Gulf, South Asian or East Asian buyer holding USD or USD-pegged currency, this aligns the entry with their home currency. The lira risk does not bite at purchase. We discuss the exact mechanics in our Turkish CBI USD 400K threshold guide.

Where the lira risk does bite

Three places. Be honest with yourself about each.

1. Operating costs. Annual property tax (Emlak Vergisi), DASK earthquake insurance, building maintenance dues (aidat), utilities and any property management fees are all denominated and paid in TRY. A high-inflation year is a year of unpleasant top-up requests. The total annual operating cost on a USD 400,000 Istanbul apartment runs roughly TRY 80,000–150,000 — which, today, is USD 2,500–4,500. Manageable, but not nothing.

2. Rental income. Long-term tenants on Turkish leases pay rent in TRY. The Turkish Code of Obligations indexes annual rent increases to a calculated rate (the lowest of CPI, producer prices or a contractual cap), and tenant protection law makes vacating a tenant slow and expensive. In sustained high-inflation periods, real rental yields lag because the indexed increase cannot fully keep up. USD-indexed rental contracts have re-emerged in the premium segment since 2023, particularly in CBI-grade buildings.

3. Exit. When you sell, payment is received in TRY and converted to USD at the prevailing rate. If you have held for the five-year capital gains exemption (covered in our Turkish property tax guide), Turkish tax is zero — but the USD value of your exit depends on whether the lira has held up over your holding period. The post-2023 policy reset has stabilised TRY meaningfully against earlier years; whether that holds through 2026–2028 is the central macro question for any new Turkish property buyer today.

The natural hedge of premium CBI property

Here is the counter-intuitive part. Premium CBI buildings — those marketed to foreign buyers at the USD 400K+ price point — operate in an effectively dollarised micro-market. Resale pricing is quoted in USD. Rental contracts in branded developments are increasingly USD-indexed (or in some cases simply paid in USD via the building's central management). Operating costs are TRY-denominated, but they are a small percentage of asset value.

Net result: the CBI segment behaves like a USD asset with TRY operating drag, rather than a TRY asset with USD entry. This is why Turkish CBI yields have been more stable in USD terms over the past three years than the headline TRY rental market would suggest. We model realistic USD net yields in our 2026 rental yield analysis.

Capital controls: what they actually mean for you

Since 2021, the Central Bank has progressively tightened the framework around foreign currency flows. The key features that affect property investors:

• Conversion at purchase must go through a Turkish bank with proper documentation (DAB or Döviz Alım Belgesi) — straightforward when supported by a local advisor.
• Repatriation at sale is permitted in foreign currency through the bank that originally received the conversion, with documentation traceable to the original DAB.
• TRY current accounts and TRY-protected deposit schemes have been used as policy levers; foreign investors generally do not interact with these.

The system is more documentation-heavy than it was pre-2021, but it functions cleanly when handled by counsel familiar with the current rules.

What 2026 looks like

The post-2024 monetary tightening has restored real interest rates and brought inflation expectations down. Most institutional forecasts for USD/TRY in 2026 sit in a 35–45 band — meaning the explosive depreciation of 2021–2023 is unlikely to repeat, but lira appreciation against USD is equally unlikely. For a new entrant buying in USD, this is a constructive picture: limited downside currency drag against entry, with a strengthening real-rate framework supporting capital values.

Working with GLMBCP

Our Istanbul advisory team structures the currency layer of every Turkish CBI transaction we handle — from selection of bank account, timing of conversion, structure of rental income, and the eventual repatriation mechanism. Currency is not a footnote in a Turkish property deal; it is the deal. Reach the GLMBCP property practice to discuss your specific case.