Inflation Expectations Surge: Gold Shines While Real Estate Preference Falters

Turkey’s Central Bank (TCMB) released the August Household Expectations Survey, revealing a sharp rise in inflation expectations and a clear shift in investment preferences.

Inflation Expectations Spike Overnight

■Households’ 12‑month ahead annual inflation expectation jumped to 45.58%, up 0.64 points from the previous month.

■The share of respondents who see food prices rising the most fell to 39.3% (‑0.4 points), yet it remains the top‑ranked category.

■Fuel and energy expectations held steady, while overall price pressure continues to climb.

Gold’s Bright Surge and the Real‑Estate Pull‑Back

■41.3% of participants now say “I will buy gold,” a rise of 1 point month‑over‑month.

■The “I will buy a house/shop/land etc.” response slipped to 37.1%, down 1.4 points.

■Expected house‑price growth fell to 32.13%, decreasing 0.36 points, signaling a cooling in the property market.

Dollar Forecast and Market Sentiment

■The 12‑month ahead dollar‑TRY expectation rose to 54.47 TL, an increase of 1.49 TL from the prior month.

■The higher dollar outlook amplifies the inflationary impact of foreign‑currency pricing.

Strategic Takeaways and Risks

■Rising inflation expectations raise the likelihood of tighter monetary policy from the central bank.

■Gold demand reflects a risk‑off stance and waning confidence in real‑asset returns.

■Weaker real‑estate appetite can be linked to higher mortgage costs and eroding consumer confidence.

■Higher dollar expectations could pressure companies with foreign‑currency debt and import‑dependent sectors.

Expert Insight (Murat Yıldız): The sharp uptick in inflation expectations may accelerate TL depreciation in the short term and intensify pressure on the central bank to raise rates. The tilt toward gold signals a classic flight‑to‑safety amid diminishing real‑asset allure. In real estate, elevated financing costs and deteriorating consumer confidence are pushing price outlooks lower. Investors should diversify, accounting for heightened FX and gold risk premiums, while focusing on short‑term liquidity management.