Under the Justice and Development Party’s 15-year rule, housing-dominated construction became a main pillar of the Turkish economy. The building spree is in plain sight, especially in Istanbul where countless new buildings have sprung up across the city, in addition to infrastructure projects, including the so-called megaprojects in the transport realm. The city’s historical silhouette and green spaces have taken a severe blow, forcing even President Recep Tayyip Erdogan to search his soul. “We have betrayed Istanbul. I, too, am responsible for that,” he said Oct. 21, in a rare instance of self-criticism.

The funds needed for the construction drive have been met largely from foreign sources. Turkey’s external debt stock stands at $432 billion today, amounting to some 52% of the gross domestic product. No precise data exists on how much of that money went to the construction sector and related fields, but existing clues suggest that a significant portion of the funds became capital for construction companies and home loans for consumers. Like other emerging economies, Turkey enjoyed abundant flows of funds from the United States and the European Union, the result of anti-crisis liquidity expansion, which kept the dollar’s price low and encouraged borrowing. Buoyed by this climate of “dolce vita,” Turkish builders — especially those active in Istanbul — rushed to grab any building plots they could find, paying little mind to the prices.

Building, selling and investing in Istanbul’s housing sector became so lucrative that the annual increase in home prices reached 30% in years when inflation fluctuated in the 8-10% range. The year 2015, for instance, was one of them. This, however, was specific to Istanbul only. The price increases in Turkey’s two other biggest cities — Ankara and Izmir — as well as the country’s overall were not even half of those in Istanbul. According to Central Bank data, the price of an average apartment in Istanbul can buy two apartments in Ankara.

Many rushed to buy homes, not for accommodation but as investments, eager to profit from the high yields the sector offered. The buying spree further stoked the builders, and the supply increased. But, as it often happens in such situations, the price increases have begun to slow down and even decline. This year, the price increases in Istanbul stand at only 8%, below the inflation rate. So what happened?