Rents in Istanbul too expensive for the head of the central bank: gigantic inflation as the cause

Rents in Istanbul too expensive for the head of the central bank: gigantic inflation as the cause

According to a report by www.tagesschau.de,

The current situation on the Turkish rental market is problematic. Even the head of the central bank, Erkan, has difficulty finding a suitable apartment in Istanbul and has therefore moved back in with her parents. This illustrates the precarious situation on the Turkish real estate market, which is particularly overheated in the metropolis of Istanbul.

This overheating is further exacerbated by massive inflation. In November 2023, the inflation rate was 62 percent compared to the previous year, while rents in Istanbul rose by 77.1 percent during the same period. The Turkish government has responded by limiting rent increases to 25 percent, but this is causing further problems as landlords try to get rid of their tenants in order to re-rent the properties for a multiple.

In her role as head of the central bank, Erkan has raised the key interest rate by 8.5 percentage points to 40 percent in order to combat inflation. Nevertheless, there are no sustainable solutions to the current problems on the rental market.

The difficult situation on the Turkish rental market and ongoing inflation not only have an impact on people's housing situation, but could also lead to further economic problems. Uncertainty in the real estate market and the central bank's temporary monetary policy measures could promote long-term economic instability. This could lead to a decline in investments and a further deterioration of the economic situation in Turkey.