'Turkey's real estate price crisis: the worst in the country's history.'

The Central Bank of Turkey released its annual report on the country's housing index last week, revealing that Turkey is facing one of the worst real estate market crises in history.

The bank said the average price of real estate in Istanbul in 2022 reached 1.6 million Turkish Liras ($110,000), up from 750,000 Turkish Liras last year (see chart below).

The bank said house prices rose by an average of 96.4 percent across Turkey in February compared to a year ago, and 106.3 percent in Istanbul. Even Kurdish cities such as Diyarbakir and Sanliurfa, in the southeast, which are considered the country's most underdeveloped regions, saw increases of 111 percent.

Turkey: rental prices and''Real estate prices rise exponentially due to lack of supply

Inflation, rising construction costs and imbalance between supply and demand are playing a major role in the real estate price growth crisis, experts say.

According to Middle East Eye, one ton of cement cost 500 liras ($60) in September 2021. Currently, one ton of cement costs about 1,400 liras ($95). "The prices of construction materials are getting more expensive every day," said contractor Ibrahim Gozju. "Last year, a cubic meter of concrete cost about 160 liras, or $20, at the exchange rate at the time. Now it costs no cheaper than 460 liras, or $32.".

Inflation was around 19 percent in September last year and then rose to 61.4 percent in March after the US dollar''has risen in price by more than 50 percent over the year. The Russian invasion of Ukraine has also affected the construction sector as commodity prices continue to rise. "For example, one ton of construction iron cost about 6,100 liras ($745) last April. Now the price is 15,000 liras ($1,022)," Gozju said.

Real estate prices rise sharply

Real estate prices are rising sharply. Middle class home seekers are the hardest hit. Economist Ugur Gürses posted a graph on Twitter showing the growing gap between the consumer price index (TUFE), which includes the cost of goods such as food, energy and transportation, and real estate prices. His graph shows that real estate prices have risen twice as much as wages in''It's impossible to buy an apartment in Istanbul.

Housing for renters has become unaffordable. Soaring real estate prices have a direct impact on rental prices. "Right now I pay 2,500 lira ($170) monthly rent for my apartment, but my landlord is demanding 6,000 lira ($410) under the pretext of a steep price hike," Keser said. According to the law, a landlord cannot impose an increase that exceeds annual inflation. However, Ibrahim Derin, a lawyer, said: "Since September last year, I have handled 140 cases of disputes between landlords and tenants, as landlords want to rent their apartments at current prices and tenants''fighting back'." The fight between landlords and tenants has become so common that many lawyers have started posting on Twitter and Instagram to inform tenants of their rights. However, the law also allows landlords to renew leases after five years.

Ozgur Çomak, a hydraulic engineer, used to live in Kağıthan, which, despite its central location, is one of Istanbul's long-neglected and recently just starting to be redeveloped neighborhoods. "My rent was 2,000 liras ($135) and I had been living in the same apartment for six years. The landlord renewed the contract and asked for 6,000 liras ($410)," Çomak said. "It was impossible for me to afford such rent at that time as my wife was not working due to her pregnancy.'''So we had to give up the apartment. Ozgur and his family now live with his parents in a three-room apartment in Esenler, another poor neighborhood.

Anger toward foreigners

The real estate market crisis has also sparked another crisis as thousands of Turks on social media began demanding the government return refugees, stop new arrivals and ban the sale of real estate to foreigners.

Turkey currently grants citizenship to any foreigner who buys real estate worth $400,000. Over the past nine years, 293,000 properties worth $41.3 billion have been sold.This growing dislike of refugees has led the government to signal a shift in its policy. On Monday''take care of others?'