Factors Behind the Upward Trajectory of Flat Rents in Turkey

Over the last few years, Turkey has been a classic example of how flat rents have jumped at an exponential rate. Tenants and potential tenants alike wonder what exactly is causing such soaring prices? There are several causes of the rise in rental prices, and it all makes for a rather daunting environment. This article explores the factors that have led to an increase in rental prices for flats in Turkey.

Urbanization and Population Growth
Because of the country's rapid urbanization and population growth, particularly in large cities such as Istanbul, Ankara and İzmir. But the big cities are becoming more popular locations, creating a demand for housing there. Naturally this forces up rents in all engulfed areas.

Economic Growth and Inflation
Higher living standards resulting from sustained economic growth has led to an increase in disposable income for the people of Turkey. Yet this type of economic growth brings inflation in its wake, which affects the general price level and rental prices.

Foreign Investment and Tourism
Foreign investors and tourists have been flocking to Turkey in increasing numbers these past few years. This wave has also led to a rise in demand for short- and long term rental accommodation, especially around tourist spots. Landlords are taking advantage of this trend, raising rents accordingly for these popular areas.

Infrastructure Development
The appreciation of property values is helped by the many ongoing infrastructure projects throughout the country, including transportation networks and urban development schemes. When property values increase, landlords often base their rents on the added value of a new asset.

Supply and Demand Dynamics
There are some cities where the number of available rentals can't meet demand. Insufficient supply of suitable housing combined with rising demand means that landlords can seize the moment to raise rents. This becomes especially apparent in the city centers and popular areas.

Cost of Construction and Maintenance
Construction materials and labor have also increased in price over time, affecting the expenses of owners for both new construction and repair to older flats. Should these costs be passed on to landlords, who then raise rental prices?

Legislative Changes
Rental prices can also be affected by changes in rental regulations and property laws. On the other hand, landlords will review rents either to reflect new legal regulations or so as not to suffer losses caused by changed regulations.

Increasing flat rents in Turkey are the product of a complex inter-relationship between urbanization, economic development, foreign investment and supply and demand. Apart from these reasons, tenants and investors must be sensitive to the rise in rental prices as a whole. They also need an awareness of the local economic situation as well keeping abreast of any legislative changes affecting rentals. The key to successfully navigating the rental market in Turkey is being aggressive, keeping an eye on what's going on out there economically and carefully exploring other cities.