Tenants across Didim, and the rest of Turkey, are bracing for major hikes in rents after the official rental rate was recalculated, with the maximum set at 65.07%.

The two-year 25 percent cap on rent hikes expired as of July 2, and landlords and tenants were waiting to see what the new figures would be, particularly those whose contracts were to be renewed this month.

According to the latest numbers of the Turkish Statistics Institute (TÜİK), the 12-month average inflation rate was 65.07 percent, which sets the upper limit for rent hikes.

This will apply to contracts to be renewed after July 2 and does not mean rents should be increased automatically as much as the 12-month average inflation rate.

Landlords may demand a hike less than inflation. Contracts are renewed only once a year and the rent hike is decided at the time of renewal.

According to laws, landlords cannot demand a rent hike above the 12-month average consumer price inflation.

On Wednesday (July 3), it was revealed that the headline CPI inflation had slowed from 75.45% in May to 71.6% in June.

However, in the minutes of the latest rate-setting meeting, released on July 3, the Central Bank warned that rent inflation is expected to remain high in the short term and will be the main group to restrain the anticipated slowdown in consumer inflation.

The annual increase in house prices continued to decline in real terms, while the seasonally adjusted data point to a significant slowdown in monthly increases in this item in recent months, the bank noted.

“This development in house prices is expected to have a restraining effect on rent inflation in the coming period,” it said.

Inflation trends

According to the Turkish Statistical Institute data, the biggest increase in consumer prices in June was seen in intercity passenger transport by road, while the biggest decrease was seen in potatoes and some tuber crops.

The price increase in intercity passenger transportation by road by road, at 12.71% was followed by water (mains water) with 12.69% and fresh fruits at 8.47%.

Other products with the highest price increases in June included hotels, guesthouses and other accommodations with 6.67%, urban passenger transport by rail with 6.15%, and bread with 5.94%.

Last month, the biggest price decrease was in potatoes and some tubers, with 8.03%. This decrease was followed by eggs and egg-related products at 6.57%, poultry meat (3.89%), fuel and oils for personal transportation vehicles (2.32%), and beef (2.29%).