Hamid HANGUL
While there is a signal that the end of the 25 percent increase in the housing rent ceiling, which was introduced in Turkey in the last two years in the face of exorbitant rent increases, representatives of the real estate sector emphasized that the 25 percent increase in the rental market remains symbolic. Experts said that in an inflationary environment, rents have increased by more than 25 percent, and sometimes there has been a compromise between the property owner and the tenant, and cases have sometimes gone to court.
“The regulation will not be extended, but the cases will not decrease”
Lawyer Mehmet Aslan, a specialist in real estate law, said the 25 percent rent cap will not be reduced between homeowners and tenants even if it is not extended from July 2024. Aslan said: “It will not decrease because the production of flats is low and not meeting the demand. “That’s driving up rental prices more than inflation,” he said. Referring to the decision of the 54th Civil Chamber of the Istanbul Regional Court, Aslan said that since inflation and rent growth rates are known not to go in the same way, landlords have the right to update the rent once every five years under Article 344 of the Turkish Code of Obligations.
“Shows it won’t last”
Real estate appraiser Ahmet Büyükduman said: “The 25 percent limit is a regulation that has no parallel in the market.” Büyükduman said that rent restrictions are also preventing new entrants to the rental housing market: “There is pressure to increase rents. Due to the rent limit, the market price is set taking into account increases in the next year. For a place that costs 10 thousand lira, the rent is 15 thousand lira, now we hope that there will be a relief from July. “There will be a return to the old practice again and it will be aligned with the average CPI figures over the last 12 months,” he said.
Preventive measures against loss of rent
ITO Real Estate Committee Chairman Hakan Akdoğan said: “Due to the constant increase, many people want to rent their houses at high prices. They are trying to prevent loss.”
“It shows a return to market conditions”
TSKB Real Estate Appraisal CEO Makbule Yönel Maya also said the 25 percent cap has been in place for the past two years and is a factor holding back rental values in a free market economy. Noting that this practice cannot be expected to repeat every year, Maya said, “One day it would end. Normally, the rate of rent increase is determined by the average of the CPI over the last 12 months.
“With inflation expected to decline, it can be assumed that rent increase rates will be more reasonable,” he said. Maya pointed out that in the two years that the rent cap was in place there had been no 25 per cent increase in residential rents across the market and that in some cases there had been an increase reflecting market conditions, Maya said: “During this process Rent growth has not increased by this pace, but there was a much higher increase. “This will mean that conditionality will be lifted from July 2024,” he said.
“It remained symbolic”
Nizamettin Aşa, president of the Istanbul Chamber of Realtors, said they saw the 25 percent limit not being applied much in market conditions, and some disputes were settled by compromise. Asha said: “Our advice has always been to compromise. However, some accepted it and some did not. The title of this work is now symbolic. Of course, there were those who introduced it and said ‘I won’t raise more than 25 percent’. Some went to court. Best to leave the market free. “It should continue at the CPI level,” he said.