How Construction Costs Affect Housing Prices

According to Turkish Statistical Institute data, the construction cost index recorded a 9.87% monthly increase and a 38% annual increase in January. While this increase directly reflects on prices in Ankara's housing market, cost calculation becomes critical for new buyers.

1. Impact of Material Price Increases on Housing Costs

Iron and Steel Price Trends

As of 2026, construction iron prices vary between an average of 29,000 TL to 33,000 TL per ton. Iron is one of the most volatile items in rough construction costs and price fluctuations directly affect the total budget.

Market lists from January-February 2026 period indicate approximately 28,800 – 31,600 TL/ton range for Ø12–Ø32 ribbed in many regions. The reflection of this material cost increase on housing prices is inevitable.

Energy and Currency Effects

Increases in exchange rates raise the costs of especially imported steel, glass and construction chemicals. This situation, together with currency fluctuations, makes cost forecasting difficult.

2. New Levels of Per Square Meter Costs

2026 Construction Cost Ranges

For 2026, rough construction cost per m2 varies on average between 8,500 – 14,500. As of 2026, average per square meter cost in luxury housing and commercial projects is expected to reach 16,000 TL range, 9,000-10,000 TL range for 1st class buildings, and 6,000 TL levels for medium quality buildings.

Increase in Labor Costs

The main reason for this is increasing labor costs rather than material prices and shortage of qualified personnel. Finding expert teams especially in formwork, iron, mechanical installation and finishing works has become difficult, causing daily wages to increase significantly.

3. Reflection Mechanism on Housing Prices

Cost Transfer

Increases in construction costs reflect on housing prices as follows:

• Starting prices increase in new housing projects
• Existing housing stock also gains value due to increasing renovation costs
• Investors revise price expectations upward due to high costs

Situation Specific to Ankara

According to CBRT February 2026 Housing Price Index data, HPI increased 1.8% monthly, 26.4% annually. Index levels were announced as 201.1 in Istanbul, 237.2 in Ankara and 208.8 in Izmir.

4. Strategies for Investors and Buyers

Right Timing

Due to demand intensity and seasonal activity, increases in concrete and labor prices can be seen especially during summer period. Spring period may be more advantageous.

Project Selection Criteria

• High construction quality projects are more valuable in the long term
• Energy efficient buildings are advantageous in terms of operating costs
• Locations close to transportation projects have value appreciation potential

Cost Management

Use of energy efficiency materials, modular construction systems and domestic production preferences will be prominent trends in cost management in the upcoming period.

5. Future Projections

Second Half 2026 Expectations

Although this partially limits per square meter cost increase, it means that the high cost environment will continue at a general level. Exchange rate balance is critical for stability in material prices.

Sustainability Factor

Initial investment cost in energy efficient and environmentally friendly projects may increase by approximately 5-7%, but this difference is balanced by energy savings and high sales value.

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