The Turkish government plans to impose a ceiling on annual rent increases to 25% amid a rally in inflation, according to Bloomberg.
Anger in the country is rising as rental prices skyrocket, with sahibinden.com reporting an average 147% increase in Istanbul for contracts signed in May.
Landlords often try to evict their tenants to sign new contracts at much higher prices, with the number of lawsuits against tenants doubling, the Sozcu newspaper reported last April.
Justice Minister Bekir Bozdag said today that the government plans to introduce a new clause in the code of obligations, with the specific setting for a 25% ceiling, which may enter into force in July and last for a year.
Under the current arrangements, the annual increases for tenants have a ceiling on the average annual inflation rate for the previous 12 months.
In May, this level reached 39.3% while it is expected to rise further. The consumer price index jumped to 73.5%, while the president Recep Tayyip Erdogan said this week that the government is not going to raise interest rates despite the inflation rally, instead it will continue to reduce them.
“This is no longer a normal market. In the last three months we have seen quarrels, threats, intimidation and lawsuits,” said Nizameddin Asa, head of a brokers’ association in Istanbul. “Both landlords and tenants are right. They are both struggling to make a living,” he added.
Source: Capital
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