Will the removal of the 25 percent rent limit cause exorbitant increases?

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Lerato Khumalo

Ankara University Faculty of Applied Sciences Dean Prof. Dr. Harun Tanrıvermiş stated that the lease agreements to be signed after July 1 will be updated according to the 12-month average of the Consumer Price Index (CPI), and that it is not possible for there to be an exorbitant increase in rents with the removal of the 25 percent increase limitation.

Tanrıvermiş, who also serves as the Head of the Real Estate Development and Management Department, held a press conference regarding the removal of the 25 percent limit on rents.

Stating that there was a significant decrease in the number of new real estate and housing projects during the Covid-19 pandemic, and therefore an increase in rents, Tanrıvermiş reminded that the 25 percent rent increase limit introduced to control this increase ended yesterday.

Prof. Dr. Tanrıvermiş pointed out that the lease agreements to be signed after July 1 will be updated according to the 12-month average of the CPI, and noted the following:

“With the removal of the 25 percent limit, there was an expectation that there would be a serious increase in rents. It is not possible for there to be an exorbitant increase. It is not possible to renew previously made contracts and request additional rent increases. Because in Turkey, according to legislation and practice, housing lease agreements and rent increases are made annually. Therefore, ‘I agreed to 25 percent in May, now it is 65 percent. Let’s revise the rent according to 65 again.’ We do not have such an application. It is not in accordance with the legislation.”

“The big bubble in rents that I can perceive from the markets and see from the advertisements has lost its effect,” said Tanrıvermiş, drawing attention to the importance of establishing a rent monitoring system.

Tanrıvermiş stated that 56 out of every 100 households in Turkey own a house and that housing production must be increased to solve the problem.

Tanrıvermiş, who also made warnings to tenants, said, “A lease agreement should not be made on the rate that determines the 12-month increase in the CPI. An eviction agreement should not be signed together with the lease agreement. The lease agreement they make should be read carefully. The laws are clear and obvious. These should be taken into consideration.”

Stating that the rate of increase in housing prices has slowed down, Tanrıvermiş said, “Starting from February, the increase in housing prices has fallen below the inflation rate. If this trend continues, the increase in housing prices will almost remain below the inflation rate towards the end of the year.”