Istanbul's Suburban Dream Is Fueled by Debt

Forty-five years ago, a person could describe Istanbul, looking at its then-suburbs, as a place of gecekondu (informal or squatter) houses. The goal of owning a house was simply to have shelter. Since then, the city and its population have grown exponentially, from less than 1 million in 1950 to about 15 million now. Very soon, Istanbul will become Europe’s most populous metropolitan area, overtaking London and Moscow. Much of that growth has taken place in suburbs on both sides of the Bosphorus.

A new suburbanism began around 2000 and accelerated amid strong economic growth (about 5 percent a year), rising living standards, and the policies of President Recep Tayyip Erdoğan that funneled investment into construction and real estate. Meanwhile, consumer borrowing has exploded. “Today in Turkey, there is a household loaning culture unseen in the period before 2003,” the economist Mustafa Sönmez has written.