According to a report by Euronews, Turkey is currently experiencing the most significant increase in housing prices among 56 countries analyzed by the real estate consultancy firm Knight Frank. Housing costs in Turkey surged by 133% compared to the same period in 2022. In an interview with Medyascope, Attorney Ali Güvenç Kiraz commented, “Of course, housing prices shouldn’t be this high, but I’m not surprised we’re ranked first globally because we are experiencing a severe housing supply shortage, coupled with high inflation.”
Housing prices in Turkey continue to surge persistently, displaying no signs of slowing. The government’s annual 25% cap on rent increases, introduced last year to address Turkey’s housing crisis, has exacerbated tensions between landlords and tenants. In a conversation with Medyascope, Attorney Ali Güvenç Kiraz provided insights into Knight Frank’s International Property Consultancy study, which covers 56 nations and positions Turkey at the forefront in terms of the rate of rent increases over the past year.
Ali Güvenç Kiraz noted, “It’s not unexpected that housing prices have surged the most in Turkey, seeing that rental prices in Turkey have risen by 132.8%.” He added, “Of course, housing prices shouldn’t be this high, but I’m not surprised we’re ranked first globally because we are experiencing a severe housing supply shortage, coupled with high inflation.”
According to Kiraz, in addition to supply and high inflation issues, the scarcity of new housing development and property sales tied to citizenship-by-investment schemes in Turkey also contribute to the rising rent costs.
“While Turkey requires a minimum of 800,000 housing units annually, only half of that number is being developed. Additionally, foreign nationals are purchasing property in exchange for citizenship. All these factors contribute to the escalating housing prices.”
Kiraz regards the dispute between tenants and landlords as Turkey’s most pressing current social issue. Kiraz highlighted a staggering 300% increase in the volume of legal cases involving landlords and tenants in the past year alone, resulting in a significant backlog in the judicial system.
He further stated, “The conflict between landlords and tenants is on a steady rise. Instances of legal disputes between the two sides are frequently seen on television. While mediators may intervene to address this issue within a few days, I have reservations about the prospects of a successful resolution.”
Kiraz contends that the primary reason for the problem’s persistence lies in the government’s focus on short-term policies. He maintained that the government has struggled to formulate comprehensive strategies to effectively address the housing challenge, beyond measures like the 25% limit. Currently, the 25% regulation is starting to pose challenges for landlords who are choosing to keep their properties vacant to avert substantial financial losses.
Kiraz believes that two critical measures are necessary to address the housing crisis effectively: implementing judicial reforms and setting both upper and lower price limits for housing.
Kiraz argued that merely intervening in the rate of rent price increases won’t offer a solution to the housing issue. He emphasized, “Instead of constraining the rate of increase, we should establish both upper and lower price limits for housing. Additionally, comprehensive judicial reform is imperative.”
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