‘I don’t know what to do’: Skyrocketing inflation and rent prices leave many in Turkey struggling

Official estimates put the country’s inflation rate at nearly 85 per cent last month, while rents have increased by more than 100 per cent in some cities, writes Borzou Daragahi

Instanbul residents have seen rents rise considerably (Getty Images)

For decades, Canan lived a fairly comfortable life as a school teacher in Istanbul. She even managed to help send her 23-year-old daughter off to study abroad, and retired earlier this year to live off a monthly pension of around 7,600 Turkish lira (£335), more than enough to pay her rent and living expenses – and leave a little for some extra.

The shock came in November, when her landlord demanded she vacates her 2,000-lira (£88) a month flat. She has been looking around for other housing in her Bakirkoy neighbourhood, but rents there have skyrocketed to between 5,500-lira (£242) for a tiny space to 11,500 (£506) a month for a flat comparable to hers. She dreads the prospect of moving to a cheaper flat in a different neighbourhood and spending nearly all her money on housing.

“I don’t know what to do,” the 52-year-old says. “I have started to have health problems because I am so stressed. I am going to the hospital regularly. I am seriously hopeless for my life. If I can’t go to the cinema or a movie or go on a vacation or go out for a meal there is no point”.

Turkey is in the grips of an economic crisis in which soaring prices are eating away at ordinary people’s savings and lives. While the United Kingdom and European Union inflation rates are around 10 per cent, Turkey’s has soared to an estimated 85 per cent. Independent analysts have also suggested the rate could be much higher.

Nowhere has the impact fallen harder than on the housing sector, where an influx of middle-class families fleeing wars and political unrest in eastern Europe and the Middle East has contributed to a spike in rental prices and home values.

According to the statistics tracker Endeksa, rents are up 159 per cent since last year, while home prices have jumped nearly two-fold.

In greater Istanbul, rents have risen about 150 per cent, while those in the city of Izmir and Ankara have risen slightly higher. Rents in the resort city of Antalya, home to many fleeing war in Ukraine and political repression in Russia, have jumped nearly three-fold.

Under Turkish law, landlords are allowed to raise rents year-on-year by only 25 per cent. But many are finding loopholes, or are simply curtailing maintenance services to try and force tenants with lower rents to move out so they can put up prices.

Despite the rental costs, vacant apartments at the lower end of the housing market often draw bidding wars in Istanbul (Getty Images)

But the high prices mean those with rents set at the pre-inflationary period are often refusing to budge, drastically lowering available housing stock and driving up prices even further. Despite the rental costs, vacant apartments at the lower end of the housing market often draw bidding wars.

“The landlord came here and said you should move out and said he was going to rent it to someone else,” said Hanim, a renter in a district on the Asian side of  Istanbul. “He said it was too inexpensive. I said we have spent money fixing this place, and you can raise the rent only 25 per cent. He kept saying it was too inexpensive.”

They later agreed to raise the rent slightly, from 1,300 lira to 1,700 lira, but the landlord came up with another tactic. He claimed he needed to give the apartment to his son and his family, one of the loopholes that allow landlords to evict tenants.

“I said, ‘You should be ashamed. You’re putting us in a terrible position,’” she recalled.

Landlords note that the inflation crisis has hit them, too. Their bills and debts are also increasing, forcing them to increase prices.

Cemal Ozcan, of Cihan Real Estate, a brokerage in Istanbul, said he himself was forced to pressure a tenant to leave a building he owns because he needed a place for his recently-married daughter and son-in-law, who were unable to find an affordable flat. He gave his tenant (of seven years) six months to move out. But the tenant found nothing, and all of them are now stuck.

“You have to look at it from the landlords’ point of view as well,” says Ozcan. “He saved everything for a lifetime to buy the property and imagine he can’t make a profit from it. Costs for landlords have increased 100 per cent while they are only allowed to raise rents 25 per cent. That forces them to find ways to make up the shortfall with new tenants. And that puts tenants and landlords into conflict.”

Turkey, like much of the rest of the world, is fighting skyrocketing inflation (AFP/Getty)

The housing crisis has consumed public debate in Turkey for months, potentially impacting the prospects of president Recep Tayyip Erdogan’s government ahead of elections to be held next year. On Sunday, people in Antalya took to the streets to protest the rising rental costs. Residents of Trabzon, a conservative Black Sea region that is a pillar of Erdogan’s political support, recently learned that their region’s rent prices were second only to Antalya, driven up by soaring construction costs and high demand for rental homes from both locals and international buyers.

This influx of international buyers into the country’s main cities has added dramatically to the pressure. Ozcan says he now handles clients from Uganda, Nigeria, Iran and elsewhere, who can afford to pay more than local residents.

“Turkish people can’t buy anything for their 500,000 Turkish lira [£22,00]),” he said. “But a foreigner who has $500,000 [£416,000] can get a lot.”

During the interview at his office in the Istanbul neighbourhood of Okmaiden, a Turkish man walked in and asked if there were any apartments available to rent in the 4,000-lira (£176) price range. Ozcan told him apologetically that he had nothing available in that price range, or anything affordable.

“Normally I used to rent out four units a month,” he says. “Now it’s more like one unit every two months. It makes me feel ashamed that I can’t help people find somewhere to live.”

Prices for utilities, building materials, and real estate taxes have all jumped over time. Increased costs and uncertainty in recent years have slowed the construction of new housing, adding to the pressures. The government has launched a project to build 250,000 new affordable housing units to ease the housing crunch, drawing eight million applicants.

Authorities are coming up with new schemes to try to curb rent increases, such as forcing landlords to post rental contracts online, thereby preventing informal cash deals with those that can afford it.

Turkey’s mimimum rise will go up substantially in 2023, helping those in Instanbul and around the country who are struggling (AFP/Getty)

In addition, the government has prevented international buyers from registering or obtaining official residency papers if they rent or even buy flats in more than a thousand neighbourhoods in urban areas across the country. At a time when most European cities are attempting to lure entrepreneurial telecommuters who earn their money abroad and spend it where they are living, Turkey recently imposed draconian labour rules making it more difficult to live as a consultant or freelancer in the country.

On Thursday, Turkey announced it would raise the minimum wage a dramatic 55 per cent next year, to 8,506 Turkish lira (£344), a move that could alleviate some economic pain but also risks exacerbating inflation.

None of the remedies appear to have had an impact. Rent notices flagrantly violate the law by demanding deposits or monthly payments in dollars or euros. Anecdotal accounts suggest the increase in housing prices is starting to prompt somewhat of an exodus of Turks from the big cities back to their hometowns, reversing a trend of urbanisation in the country that began decades ago. Economists fear that this migration could lead to labour shortages that may further aggravate inflation.

“Istanbul has become great for the rich, hell for the middle and lower classes,” said one user on a popular social media chat site.

Canan, who asked that her last name not be used, has little to fall back on as the pressure for her to move out increases. She has lived in her flat for more than 10 years, giving her landlord the right to ask her to leave. She says she has retained a lawyer and joined a renters association to press her case but fears all legal channels have been exhausted. She says feels betrayed by the government and her nation.

“We sacrificed so much, but our country does not value our work or lives,” she says. “The system makes you feel like nothing.”