The 25 percent limit on rent increases has ended

Real Estate Expert Mustafa Hakan Özelmacıklı stated that the regulation limiting the housing rent increase to 25% in renewed lease periods between June 11, 2022, and July 1, 2024, will expire as of July 2.
In housing, the regulation limiting the housing rent increase to 25% in renewed lease periods between June 11, 2022, and July 1, 2024, is coming to an end. Mustafa Hakan Özelmacıklı, the Global General Manager of Altın Emlak, who made evaluations on the subject, stated that ‘as of July 2, 2024, the 25% rent increase limit in housing lease contracts will expire. From now on, the upper limit for increases in renewed lease housing rents will be applied as the last 12-month average of the Consumer Price Index. Recent regulations regarding these limits have not been strictly followed in the market, and have not found mutual agreement between the parties. With the removal of the rent increase limit, disagreements between property owners and tenants in properties rented in the last year will be less subject to lawsuits. Homes kept vacant due to sale can be offered more for rent. Risks for investors will decrease slightly.’
“Return to CPI”
Reminding that the increase in CPI rates in housing was temporarily suspended within the framework of the regulation, Özelmacıklı stated ‘In workplaces, increases had already continued based on the last twelve-month average of the CPI, and disagreements on this point had relatively occurred less. The removal of the 25% limit does not give landlords the right to make unlimited increases or arbitrarily determine the rent. In fact, if a fixed increase lower than the CPI is written in the contract, this limit will be considered valid. Rent amounts are determined in the renewal month of the contract, and making a mid-term adjustment to the rent after the law change is legally invalid.’
“Rental prices continue to rise”
Özelmacıklı, expressing that due to the current limitation, property owners actually increased rent prices in advance and in many regions, rent increases have been well above inflation in recent years, said ‘Looking at the distribution according to ownership status, 60.7% of our citizens are homeowners while 27.6% are tenants. It is estimated that there are about 7 million tenants in our country in this context. Many property owners had given up buying investment purpose houses due to this limitation, and the supply of rental apartments had decreased significantly. Meanwhile, demand continues to increase due to reasons such as earthquakes, urban transformation, universities, job transfers, marriage, and divorce. We should develop policies to increase the supply of rental housing. Otherwise, in the coming months, not being able to find rental apartments and the increase in rental prices will lead to a social crisis.’
Sample calculation
Stating that according to the TUIK May data, the Consumer Price Index (CPI) value increased by 62.51% based on the twelve-month averages, Özelmacıklı said ‘For example, a housing rent of 10,000 TL with a 25% increase will be at the level of 12,500 TL, but after the new regulation, it will rise to 16,251 TL when calculated based on the increase in the CPI rate. The inflation figure for June will be announced by TUIK on July 3. Increases will be based on the last 12-month average value.’