Inflation rates were announced today by Turkish Statistical Institute and the rate of rent increase for October 2019 was announced.
Landlords and tenants are investigating the September consumer price index (CPI) to see the rent increase rate this month.
When leases are renewed, a certain percentage of the annual increase is applied. This increase is calculated under the Obligations Act.
In 2018, due to the negative impact of the rise in inflation rates on rents, the rent increase rate calculation was changed.
The Medium Term Economy Program (2019-2021) prepared by the Ministry of Treasury and Finance and the Strategy Budget Directorate was announced in September last year.
According to the New Economic Package, increases in rental prices can no longer be calculated with respect to the Producer Price Index rates, and instead of this the upper limit of the rent increase rate will be calculated according to Consumer Price Index (CPI) rates.
According to this change, the Turkish Obligations Act will base on the average of 12 month CPI rate as a basis for determining the rent change rate, and this act will be applied in both new and renewed leases.
Rent increase rate for October 2019
As of today, it has become clear how much hike will be applied to new tenants or those who will renew their leases this month.
While the Consumer Price Index increased by 0.99% per month, the Domestic Producer Price Index increased by 0.13% per month.
In September, the Consumer Price Index (2003 = 100) increased by 0.99% compared to the previous month, 8.42 percent compared to December of the previous year, 9.26 percent compared to the same month of the previous year and 18.27 percent compared to the averages of twelve months.
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Domestic producer price index (D-PPI) increased by 0.13 percent in September 2019 compared to the previous month, 6.53 percent compared to December of the previous year, and 2.45 percent and twelve-month averages compared to the same month of the previous year.
Accordingly, the landlord will raise the rent by 18.27 percent.
Edit By: Realty Group