Turkey acts to limit rent increases amid runaway inflation

Buildings in Istanbul. Photo: Pixabay/btastinkaya

Turkey’s parliament voted on Wednesday to pass a temporary amendment to existing legislation to protect tenants by limiting rent increases in the face of soaring inflation rates in the country.

According to the new regulations, rent price increases will be limited to 25% until July 2023.

“Rents can only be increased by 25%. We tried to protect the rights of tenants and landlords,” Turkish Justice Minister Bekir Bozdag told reporters ahead of Wednesday’s parliamentary vote.

The new regulations came after senior officials from the Ministry of Environment, Planning and Climate Change, the Ministry of Justice, the Ministry of Treasury and Finance and the Ministry of Commerce held a series of meetings to discuss possible steps to resolve the issue.

However, market experts said the decision favors tenants but will make landlords uncomfortable.

“We cannot say that there is a balanced and intermediate solution. Considering the continuous increase in the rate of inflation, this is a comforting step for tenants,” Ali Guvenc, president of the Real Estate Law Association, told the Turkish newspaper. Cumhuriyet.

Guvenc said owners would be unhappy because the official annual inflation rate in May was 73% according to TurkStat, but independent researchers say the actual inflation rate is as high as 160%.

Home ownership and affordable rents have become a pipe dream for many Turks as the country’s economic crisis deepens.

Property prices, taxes and utility bills continue to rise due to high inflation rates as well as the loss of value of the Turkish Lira.

On Thursday, the Turkish lira hit a new all-time low, with the US dollar now equal to 17.2 liras. One US dollar was worth 14 lira just a month ago and around 8.5 lira a year ago.

As a result, property prices – whether for rent or for sale – have soared in Turkey, where President Recep Tayyip Erdogan’s government has been accused of losing control of inflation.

According to Emlakjet, a real estate sales site, in April the average rent in Istanbul was 6,500 lira, or 352 euros, while the monthly minimum wage in the country is 230 euros.

Rental prices in Turkey’s largest city, Istanbul, jumped 112.3% between March 2021 and March 2022, the Center for Economic and Social Research at Istanbul Bahcesehir University said in a study published on March 18.

This compares to 122% in Antalya, 106.7% in the capital, Ankara, and 75% in Izmir.

Sharon P. Juarez