ISTANBUL: Turkey‘s residential property price index (RPPI) leapt an annual 96.4% in February in nominal terms, central bank data showed on Monday, surging against a background of rising inflation.
In the country’s largest city Istanbul, home to around a fifth of Turkey’s population of 85 million, the index climbed 106.3% on the year.
The surge follows a lira slump in late 2021 – a year in which it lost 44% of its value against the dollar – setting off a spiral of import-related inflation.
The annual increase in the RPPI – which measures quality-adjusted price changes of homes – had stood at 77.5% in January and 59.7% in December. Nearly a year ago the index’s annual rise was 32%.
The February RPPI was up 26.9 percent in real terms on the year and rose 13.5% from a month earlier.
Turkey’s consumer price inflation climbed to a 20-year high of 61.1% in March, from 54% in February. According to Turkey’s Statistical Institute, average rents – which began soaring nationwide in December when the lira touched a record low – rose 19.7% year on year in March.
However, data from real estate website EmlakJet, and from competitor Sahibinden analysed by Bahcesehir University, show rents nearly doubled over that period.
Evidence on the ground suggests even that is an underestimate, Reuters reported last week.
Many potential renters have given up searching for properties in what some sector specialists view as an incipient housing crisis, stoked not just by inflation, but an ailing lira currency, a hot property market, local population growth and a steady influx of immigrants.