In recent statements made by the economy management, it was stated that the 25 percent increase limit could be lifted. However, no clear statement was made that 25 percent will definitely not continue. Well, will there be a decrease in rents when the 25 percent increase limit is removed? Here are the details on the subject…
Landlords who want to rent out their houses are impatiently waiting for July 1. The expectation of many landlords on July 1 is that the 25 percent limit will be lifted…
It is said that landlords are hesitant to rent out their houses in case the 25 percent limit is not lifted. It is stated that some houses remained empty for 4 months, neither sold nor rented out.
‘The 25 percent limit has not been applied much in the market’
So for what other reasons can’t find a rental apartment in the market? Will there be a change in rental prices after the 25 percent increase limit is lifted? After July 1, will there be an increase in rental apartment advertisements in the market? When will we see normalization in rents?
Explaining the curious ones about the subject to Milliyet, Real Estate Expert Mustafa Hakan Özelmacıklı used the following statements:
“With the legal regulation made in June 2022, a 25 percent limitation was imposed on rent increases. For about 2 years, we have been seeing the upper limit of 25 percent in rent, limited to residences.
‘Raise limit may be lifted’
We see that this limit is not applied much in the market. In statements made by both the Minister of Justice and the Minister of Treasury and Finance, there were some evaluations that the 25 percent increase limit would be removed.
Recently, a survey conducted by a research company was published. Accordingly, it was reflected in the media that approximately 86 percent of tenants increased rents by more than 25 percent.
‘They keep them empty due to selling’
When we look at it from this perspective, we see that some property owners keep their houses empty mostly due to selling their properties. In other words, it is not possible to say that they are kept empty only because of renting out or because of the rent restriction.
‘Investors do not want to buy housing’
Investors do not want to buy housing due to the 25 percent increase limit. There are reasons such as the increase in landlord-tenant disputes, the increase in deposit interest rates, and the fact that rental income is not considered sufficient.
‘Houses are not empty due to the increase limit’
The statement that they are waiting for July just to avoid the 25 percent limit is not true. This rent regulation has not been extended yet, and if they rent it out now, next year’s increases will be based on the CPI. For the time being, it is not possible to say that keeping vacant is directly related to the rent increase.
’60 percent of the advertisements are empty houses’
We can say that nearly 60 percent of the houses in the advertisements for sale on the advertisement sites consist of vacant housing advertisements, 20 percent of the houses are rented, and 20 percent of the houses are owner-occupied houses.
1 in 4 of these ads are placed in Istanbul. In Istanbul, nearly 53 percent of the advertisements are vacant houses, 26 percent are rented houses and 10 percent are owner-occupied houses.
‘There is no point for owners to keep their houses empty’
Suppose the owner rents out his apartment at the beginning of June. Assuming that the 25 percent rent restriction will not continue, there is no point in keeping the apartment empty. If he keeps it empty, the fees paid for housing are an important expense item. We can say that some owners are inclined to sell their apartments due to exit from housing investment, and if the tenants have left, they tend to sell them empty.
‘There are those who keep the housing empty due to urban transformation’
A significant portion of the vacant houses that are not included in the advertisements are there due to urban transformation. With the plan to enter urban transformation, for some immovable properties, the owners aim to keep their apartments empty after the tenants leave. Let’s say that the building is included in the scope of urban transformation within 1 year, in this case, there may be situations such as demanding the expenses incurred by the tenant.
After July 1, will rental apartments increase in the market?
We do not feel this seriously in the market. Especially if the owner rents it out even today, he will raise it according to the CPI next year. I don’t think there will be too many rental apartments after July 1.
Today, a person with 1 million TL can find a very comfortable rental apartment with the interest he will receive from the deposit. This makes it economically difficult to find apartments in the market. We can say that the new supply of rental apartments can only increase if the inspections in daily rental apartments are increased and inspections are made.
Will there be a decrease in rents after July 1?
We do not expect much of a downward change in rental prices. Tension is increasing in rental prices. Square meter rental prices in Istanbul have reached 200 TL. Square meter prices, which were 160 TL in August, are close to 200 TL these days.
Istanbul can be considered as a city where rental prices are currently lower than inflation, but when we look at this in terms of Ankara, rents that were 115 TL in August are now 150 TL per square meter.
When will we see normalization in rents?
The tension in rent prices may decrease as economic policies are seen more effectively. As deposit interest rates start to fall, rents may normalize a little more as long as inflation decreases show their effect.”
