With the removal of the 25% cap on rent hikes, September brings significant changes in rental costs across Turkiye, driven by the latest inflation data.
As the summer draws to a close, renters and property owners across Turkiye are faced with significant changes in rental costs. With the expiration of the government-mandated 25% cap on rent increases in July, September 2024 marks the first month where rents are fully determined by the 12-month average Consumer Price Index (TUFE) published by the Turkish Statistical Institute (TUIK). Here’s a detailed breakdown of what to expect and how to calculate your new rent.
End of the 25% Rent Cap in Turkiye
For the past two years, the Turkish government enforced a 25% cap on rent increases to protect tenants from soaring inflation. However, this cap expired on July 2, 2024. As a result, landlords are now allowed to increase rents based on the latest TUFE data, which reflects the average inflation over the past 12 months.
Key Points:
- The 25% cap on rent increases expired in July 2024.
- Rent adjustments for September 2024 are based on the 12-month TUFE average.
- Landlords cannot exceed the TUFE-based increase.
September 2024 Rent Increase Rate
According to TUIK, the 12-month average TUFE rate for September 2024 stands at 64.91%. This means that for rental agreements due for renewal, landlords can raise rents by up to 64.91%. Here’s how this increase translates into real-world figures:
Example Calculation:
- Current Rent: ₺19,000
- September 2024 Increase Rate: 64.91%
- Rent Increase Amount: ₺12,333
- New Monthly Rent: ₺31,333
Without the previous cap, the jump in rent is significant. If the 25% cap were still in place, the new rent would have been just ₺23,750, a difference of ₺7,583.
Impact on Residential and Commercial Properties
This change affects both residential and commercial properties, with businesses also seeing sharp increases in rental costs. Property owners and tenants should carefully review their rental contracts to understand the specific terms and ensure that any increases align with the TUFE guidelines.
How to Calculate Your Rent Increase
To calculate your rent increase:
- Determine your current monthly rent.
- Apply the September TUFE rate (64.91%).
- Multiply your current rent by the increase rate to find the additional amount.
- Add the increase to your current rent to find your new rent.
For example:
- Current Rent: ₺19,000
- TUFE Rate: 64.91%
- Rent Increase Amount: ₺12,333
- New Rent: ₺31,333
Expected Inflation Trends
While the current TUFE rate is high, economists predict a gradual decline in inflation toward the end of the year. In August, annual inflation was projected to drop from 61.78% to 52.20%, and further decreases are expected.
Future Outlook:
- August inflation projection: 52.20%
- End of 2024 inflation forecast: 42.84%
Tenants and landlords should monitor these trends, as future rent adjustments will continue to be influenced by the evolving inflation landscape.
Source: NTV / Prepared by Irem Yildiz