Macro and Politics

* The CBT will release the Residential Property Price Index (RPPI) for September @ 10:00 local time. The Residential Property Price Index (RPPI) rose by 2.5% m/m and 31.4% y/y in August, reaching a level of 192.5. Yet, in real terms, the index posted an annual decline of 1.2%. Although the annual real depreciation in housing prices has persisted uninterruptedly since February 2024, the pace of this depreciation has been moderating. We believe that the recent annual increase in mortgaged home sales, despite mortgage rates remaining elevated above 40%, was partly driven by expectations of future price hikes, as real house prices—having been in decline for some time—have recently shown signs of stabilization. Looking ahead, we expect the annual change in real house prices to turn positive in the near term.

* TURKSTAT will release September house sales figures @ 10:00 local time. Housing sales rose to 143,319 units in August, marking an annual increase of 6,8% and a mere 0.3% rise m/m. Mortgage-backed sales recorded an annual rise of 45.2% and a monthly rise of 7% during this period, reaching 19,712 units. Turning to mortgage interest rate dynamics, the average mortgage rate stood at 43.53% in August 2024 and eased marginally to 40.36% in August 2025, signaling a rather limited annual decline. The y/y increase in mortgaged home sales appears to have been driven by expectations of further price appreciation, despite mortgage rates remaining elevated above 40%. These expectations are likely supported by the recent stabilization in real house price depreciation, following an extended period of real term decline. The August data suggest that both the momentum in mortgage-backed sales and the underlying price dynamics persisted during the month. Turning to the breakdown of housing sales data, a total of 1,810 units were sold to foreigners in August, marking an 19.8% y/y decline. In the same month, sales to foreign buyers accounted for 1.3% of total housing transactions.

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the period of October 3 – 10 @ 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that during the week of October 3 – 10, net international reserves rose by USD1.96bn to USD77.1bn, while gross FX reserves increased by USD3.61bn to USD190bn. We anticipate that today’s official reserve data will likely reflect a similar rise in line with our estimates. To recall the previous week’s data: Foreign investors were net sellers through standard portfolio channels in the week of September 26 – October 3, recording net outflows of USD84.1mn from equities and USD358.5mn from bonds (excluding repo transactions). The foreign share in total government bond stock remained unchanged at 6.8%. Moreover, during the week of September 26 – October 3, the residents’ FX deposits dropped by USD658mn (excluding gold accounts and adjusted for the EUR/USD parity effect), while their total FX deposits (including gold, price adjusted) increased by USD196mn during the week of September 26 – October 3. In terms of official reserves, the CBT’s gross FX reserves increased by USD3.3bn to USD186.4bn and net international reserves rose by USD2.5bn to USD75.2bn, while net reserves excluding swaps climbed by USD2.3bn to USD59.4bn.