What will be the rate of increase if the 25% ceiling application on rents is lifted?

The 25% ceiling application on housing rents is expected to expire on July 2, 2024. For housing leases that will be renewed in July, the increase is “expected” to be around 64.6%. As part of the fight against inflation, a temporary law was passed in parliament in June 2022, imposing a 25% ceiling on housing rents. The application, which ended in July 2023, was extended for one year. Landlords and tenants are wondering how much rent increases will be in July.

If the application is not continued or a new limit is not introduced, rent increases will be calculated based on the 12-month average inflation rate as before. According to the latest inflation data released in March, the 12-month average stood at 55.91%. So, without the 25% ceiling application, landlords could have increased rents by up to 55.91% in March. So, what is the expected 12-month average inflation rate for July?

According to the latest CBRT Market Participants Survey, inflation is expected to reach around 44% by the end of the year. To meet this expectation, the average monthly inflation rate for the rest of the year needs to be around 2.5%. Based on these calculations, the development of 12-month averages (monthly ceiling rent increase rate) in the coming months is expected to be as follows:

HIGHEST RATE OF INCREASE FOR THOSE TO RENEW CONTRACTS IN AUGUST

Looking at the data, the ceiling rate of increase for those renewing contracts in July will be around 64.6%, while this rate will increase to 70.9% for renewals in August. In the following months, the rate will decrease. This is due to the base effect.

SOURCE: https://www.ekonomim.com/foto-galeri/gundem/kirada-yuzde-25-tavan-uygulamasi-kalkarsa-zam-orani-ne-olacak-galeri-738378?p=2