Demand for housing set to rise

ISTANBUL

Demand for rental houses is expected to pick up further in the next couple of months, stoking concerns that tensions between landlords and tenants will only intensify.

The wedding season is approaching, some 600,000 applications have been filed to benefit from the urban transformation scheme, and migration from the earthquake-hit areas to safer places is continuing, said Mustafa Hakan Özelmacıklı, a real estate expert. “All this means higher demand and problems in the housing market.”

Prices are rising sharply, he said, noting that a 100-square meters apartment’s monthly rent is around 12,000 to 16,000 Turkish Liras on average in Istanbul.

People living in the provinces of Antalya and Mersin also experience sharp rises in rent prices, according to Özelmacıklı.

“This is a market where one cannot find an apartment with a monthly rate higher than 15,000 liras in [the popular tourist destination of] Bodrum.”

Özelmacıklı said he does not expect rent prices to come down in the short term but noted that there were some factors that put a brake on the rent prices.

Real estate is not an attractive instrument anymore compared with other assets, Özelmacıklı also said. “People can make larger gains from the FX-protected deposit account scheme. You can rent out an apartment, which is bought for 10 million liras, for 10,000 liras a month. But the interest income from the FX-protected deposit account is bigger.”

This discourages people from investing in real estate, according to Özelmacıklı.

There are still problems regarding access to housing loans, which slows the demand for houses put up for sale in the market, he said.

The residential property price index increased by 141.5 percent in February from a year ago, the Central Bank said this week. The real increase was 56.3 percent, while the index advanced 8.4 percent from January.