This prompted many to invest in real estate to preserve their savings against rising inflation. With housing in short supply, prices have soared.
People chose to buy real estate rather than keep savings in low-interest bank accounts. and cut Turkish Central Bank Interest rates to 9 percent, despite inflation, which independent economists say reached 170.7 percent in November.
Turkish President Recep Tayyip Erdogan believes that higher borrowing costs lead to higher prices, while most economists say that raising interest rates is the traditional antidote to inflation.
Foreign buyers also flooded the Turkish real estate market, lured by the Turkish lira to lose about 28 percent of its value against the US dollar since the beginning of the year, in addition to being hit even worse in 2021.
Turkey also offers the opportunity to obtain citizenship through the purchase of real estate.
Home sales to foreigners rose 20.4 percent between January and November, compared to the same period last year, according to the state statistics institute.
The majority of buyers were Russian citizens, followed by Iranians, Iraqis and Ukrainians.
The crisis led to a rise in the Turkish housing price index by about 190 percent in September, compared to the previous year, according to central bank figures.
The annual rise was a staggering 212 percent Istanbulthe most populous city in Turkey.
Inflation and soaring home prices have also led to unprecedented rent increases.
Real estate agent Kinan Altinay told The Associated Press, "It’s the first time we’ve seen something like this, where we’ve seen prices go up so much, every year, we see a difference of 20 percent or 25 percent, but this year, the difference is 200 percent.".
In an effort to keep prices in check, the government has imposed a 25 percent cap on rent increases, but few landlords are sticking to the rule as they try to keep their profits on par with inflation.
Real estate lawyer Idel Bora says the courts are overwhelmed with eviction lawsuits over rent disputes.
He said that the civil magistrates’ courts, which are charged with hearing these cases, have such heavy workloads that hearing dates are set after five or ten months.".
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High prices have made finding affordable housing to rent or buy an uphill battle for many, especially for the millions of people who earn the minimum monthly wage of 5,500 lira ($295) and who also struggle to cover food, energy and other expenses.
While rising construction costs and inflation have pushed up house prices globally, the real estate crisis has worsened Turkey Because of the policy of lowering interest rates despite high inflation, which is the opposite of traditional economic thinking.
This prompted many to invest in real estate to preserve their savings against rising inflation. With housing in short supply, prices have soared.
People chose to buy real estate rather than keep savings in low-interest bank accounts. and cut Turkish Central Bank Interest rates to 9 percent, despite inflation, which independent economists say reached 170.7 percent in November.
Turkish President Recep Tayyip Erdogan believes that higher borrowing costs lead to higher prices, while most economists say that raising interest rates is the traditional antidote to inflation.
Foreign buyers also flooded the Turkish real estate market, lured by the Turkish lira to lose about 28 percent of its value against the US dollar since the beginning of the year, in addition to being hit even worse in 2021.
Turkey also offers the opportunity to obtain citizenship through the purchase of real estate.
Home sales to foreigners rose 20.4 percent between January and November, compared to the same period last year, according to the state statistics institute.
The majority of buyers were Russian citizens, followed by Iranians, Iraqis and Ukrainians.
The crisis led to a rise in the Turkish housing price index by about 190 percent in September, compared to the previous year, according to central bank figures.
The annual rise was a staggering 212 percent Istanbulthe most populous city in Turkey.
Inflation and soaring home prices have also led to unprecedented rent increases.
Real estate agent Kinan Altinay told The Associated Press, “It’s the first time we’ve seen such a thing, where we’re seeing prices skyrocket. Every year, we see a difference of 20 percent or 25 percent, but this year, the difference has reached 200.” percent”.
In an effort to keep prices in check, the government has imposed a 25 percent cap on rent increases, but few landlords are sticking to the rule as they try to keep their profits on par with inflation.
Real estate lawyer Idel Bora says the courts are overwhelmed with eviction lawsuits over rent disputes.
He said that the civil magistrates’ courts, which are charged with hearing these cases, have such heavy workloads that hearing dates are set after five or ten months.