Justice Minister Yılmaz Tunç late Monday said Türkiye was working on extending a measure limiting annual rent increases to a maximum of 25%.

The Rent Increase Measure

Türkiye introduced the measure in June last year as residents struggled to find affordable homes to rent or buy due to soaring prices, prompting the government to act.

Inflation and Rent Prices

Inflation peaked at a 24-year high of 85.5% last October but has eased this year and dropped to below 40% in May.

The rent measure was set to expire at the start of July this year. Before the regulation, once-a-year price hikes for existing tenants were capped at the average annual inflation rate over the past 12 months.

Minister’s Response

“We are working (on it); it will get done,” Tunç reported by Anadolu Agency (AA) as saying in answer to a reporter’s question on the issue.

He was speaking after a meeting of an executive committee of President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AK Party), noting that it was Parliament that had the authority to pass such measures.

Impact on Inflation and House Sales

The regulation aimed at limiting the further impact of rent increases on inflation. Rent, along with petrol vehicles and cigarettes, has the heaviest weighting in the official inflation basket.

Soaring prices prompted a steep decline in house sales in Türkiye this year. Sales fell some 16.3% year-over-year from January through May to 482,143 units, according to the Turkish Statistical Institute (TurkStat) data.

Easing House Prices

Although remaining high, the increase in house prices has been easing over the recent months, the central bank data showed Friday. The residential property price index (RPPI), measuring the quality-adjusted price changes of homes, surged an annual 121.25% in April in nominal terms, marking the lowest increase since March 2022.