The price of the Russian-Ukrainian war for the Turks

Osman Pashaev reflects on the causes and consequences of the real estate crisis in Türkiye

Türkiye cannot cope with the real estate crisis. Every third citizen of the country lives in a rented house.

The increase in rental rates can no longer be explained by inflation and devaluation of the lira. The cost of rent doubles, and sometimes even triples ahead of the devaluation of the Turkish currency.

Over the past year, the lira has fallen in price by exactly half - from 13 lira to the dollar in May 2022 to 26 lira now.

At the same time, the monthly rent of a two-room apartment in Antalya increased from 3,000 liras to 20,000 liras.

The Sözcü publication considers the Russian war against Ukraine to be the cause of the real estate crisis. The flow of Russians (who have a small choice of countries to escape from mobilization) to Antalya has increased.

The Turkish parliament has already twice passed laws limiting rent increases to 25% once. If the owners had followed these laws, the old tenants would have started paying, for example, 3,750 liras instead of 3,000 last year, and 4,700 liras this year. However, there are no such rates even in the least popular places of Türkiye. In particular, in the regions affected by the devastating earthquake of February 6, 2023, Kahramanmarash, Malatya, and Gaziantep lost a quarter of their housing stock. Rent rates for a three-room apartment have increased here from 1,500 liras (100-120 dollars last year) to 15,000 liras (700-800 dollars now).

Landlords have little reason to terminate agreements with conscientious tenants. However, they find loopholes: an apartment is needed for grown-up children, a couple is separating, one of the owners needs a place to live, etc. Having gotten rid of the old tenant in such a semi-legal way, the owners bypass the restrictive ban and in a few months can rent out housing at the market price.

The number of clashes between landlords and tenants has increased in the country. In order to get rid of old tenants, landlords accuse them of violating public order or forcefully cut off electricity and water supply. Because of such actions, foreign tenants often "voluntarily" leave their homes.

In Istanbul, the number of landlords who refuse long-term leases and "grey" rent apartments on a daily or monthly basis is increasing.

The scheme looks like this: they agree with the tenants on the possibility of long-term residence, but fix the agreement for a maximum of three months and take the money in advance. There are no confirmations of the long-term rental of the apartment from the tenant. It is impossible to register in an apartment according to this scheme, so the market for illegal residence at the fake address is flourishing.

Instead, the police increase the number of passport checks and can deport foreigners living without registration.

The country, which 10 years ago was a model of civilized relations between tenants and owners, now resembles the post-Soviet space of the early 1990s. The authorities currently do not have a solution on how to change this situation. Economists from the opposition camp criticize forced restrictions on rental rates, calling it "Argentinization" of the national economy and predicting the next step - price restrictions on food and clothing, which will lead to commodity shortages and the flourishing of speculation.