Turkey is currently facing one of the worst property crises in its history after a number of economic causes have resulted in the doubling of housing prices in the country, data by Turkey’s Central Bank has revealed.
According to bank’s release of its annual report last week on the housing index in Turkey, the average price of a property in the city of Istanbul has risen from 750,000 Turkish lira last year to 1.6m Turkish lira ($110,000) in 2022.
That sharp increase in house prices was seen throughout the entire country, with the February’s year-on-year increase in Istanbul amounting to 106.3 per cent and even the least developed Kurdish-dominated cities of Diyarbakır and Sanlıurfa having a 111 per cent increase. In the country overall, the average increase in house prices that month was 96.4 per cent.
The staggering rise in property prices comes at a time when Turkey is undergoing its own economic crisis and has experienced the plummeting of its lira over the past year. Causes of the increase are said to be inflation, imbalance between supply and demand, the increasing costs of construction, and the ongoing Russian war in Ukraine which has delayed materials and created shortages.
According to the London-based news outlet Middle East Eye, one tonne of cement cost 500 lira ($60) in September, but now one tonne of cement costs around 1,400 lira ($95). In terms of inflation, which rose to 61.6 per cent last month, salaries have not adequately been keeping up with it while property prices have increased two times more than salaries. That is all while the monthly minimum wage in Turkey is only 4,253 lira ($290).
Such factors have made it ever more difficult for Turks and their families to purchase homes and properties, even small apartments. As the head of the construction company Kiptas, Ali Kurt, stated recently, “It becomes impossible for people to buy an apartment as one square metre of an apartment is around 14,000 lira ($955) in Istanbul. In other words, an average 100 square metre apartment is 1.4m lira ($95,000).”
Another effect of the stark rise in property prices is reportedly the growing discontent with foreigners and refugees that many Turks are increasingly holding, as they blame the millions of refugees in the country for allegedly taking up space and foreigners for buying up properties in the country.
That is due to laws which give foreigners incentives to do so, with the Turkish government currently granting citizenship to any foreigner who purchases a property worth $400,000. That has reportedly led to 293,000 properties worth $41.3 billion having been sold to foreigners over the past nine years.