Turkey: Victim of inflation, the head of the Central Bank points to the housing problem in Istanbul

It is difficult to find accommodation in Istanbul, even for the governor of the Central Bank. Gaye Erkan, appointed in June by Erdogan to reduce hyperinflation in the country, explained in the press that she had returned to live with her parents due to a lack of housing. This is a way of highlighting poor housing, one of the main problems in Turkish cities.

Turkish Central Bank Governor Hafize Gaye Erkan during the presentation of an inflation report, in Ankara on July 27, 2023. AFP - HANDOUT

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Is Istanbul more expensive than Manhattan?" Gaye Erkan asks the question in the columns of Hurryet, one of the country's leading daily newspapers.

She left the United States, where she had lived for more than 20 years, for Istanbul six months ago. With a husband and a child, the banker says she was forced to move back in with her parents because she couldn't find a house at affordable prices for her family.

Despite Gaye Erkan's policy of tightening monetary policy by raising interest rates, inflation is not abating in Turkey. It was still around 60% in November.

Capped rents

It's even worse for housing prices. This is due to the increase in construction costs... and supply shortages. Gaye Erkan denounces the lack of social housing which leads to an increase in rents and which she says is "specific to Turkey" with, in her sights, multi-owners. "One person shouldn't own ten houses," she insists.

For the past year and a half, the Turkish government has capped the revision of housing rents at 25%. This provision is not always respected, and legal proceedings between landlords and tenants are multiplying in the face of this surge in prices.

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• Turkey
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