International
Turkish Property Market Soars to Unprecedented Heights, Out of Reach for Most Turks
Rapid rent increases and property prices in Istanbul have reached staggering heights, rendering even ordinary properties unaffordable for most Turks. Over the past two years, the cost of real estate per square meter in the city has skyrocketed by over 480%, according to consulting firm Endeksa. Adjusted for inflation, housing prices in Turkey as a whole rose by 51% last year, surpassing all other major economies, as reported by a study conducted by the Bank for International Settlements.
The primary factors driving this surge are reckless interest-rate cuts and resulting inflation, both stemming from the policies of Turkish President Recep Tayyip Erdogan. These developments have encouraged individuals with access to credit to invest in property as a means of preserving their wealth. Foreign buyers, particularly Russians, have also played a role in driving up prices, especially in Istanbul and along the Mediterranean Riviera.
The destructive earthquakes that struck southern Turkey earlier this year, claiming the lives of over 50,000 people, have had further repercussions. The estimated 3 million individuals displaced by the disasters have relocated to other parts of the country, leading to an abrupt spike in demand.
Concerns about a potentially devastating earthquake in Istanbul, which lies just north of a significant fault line, have caused the prices of newer and safer buildings in the city to surge. Interestingly, according to a recent study by Bahcesehir University’s Center for Economic and Social Research, the neighborhoods farthest from the fault line have witnessed the highest price increases.
While one might anticipate a burst in this property market bubble, even recent policy changes may not be enough to bring the market back to reality. On June 22nd, Turkey’s central bank implemented a policy U-turn by increasing the benchmark interest rate by 6.5 percentage points. However, analysts suggest that prices will continue to rise, albeit at a slower pace, as long as inflation expectations remain high.
Unfortunately, inflation expectations remain persistent. The recent interest rate hike deemed insufficient to make a substantial impact, failed to alleviate pressure on the Turkish lira, which swiftly plummeted by 3% against the dollar within an hour of the decision. Since President Erdogan’s reelection on May 28th, the currency has depreciated by 18%. This, along with a recent 34% increase in the minimum wage, on top of a 55% increase six months prior, is expected to sustain inflationary pressures.
As the Istanbul property market continues its meteoric rise, it poses significant challenges for ordinary Turks struggling to find affordable housing. The government may need to implement further measures to address the growing housing affordability crisis and curb excessive speculation. Meanwhile, investors and analysts closely monitor the market, anticipating a potential adjustment in the future, albeit at a more moderate pace of growth.
The United States has imposed sanctions on Francesca Albanese, the United Nations’ special rapporteur on Palestinian rights, due to her stance against Israel.1 US Secretary of State Marco Rubio announced the decision on Wednesday (July 9), stating that Albanese’s “political and economic attacks” against the United States and Israel would no longer be tolerated.2
Rubio posted on X (formerly Twitter), “We will always stand by our allies’ right to self-defense.”
Albanese has a long history of submitting reports to the UN critical of Israel. She has notably labeled Israel an ‘apartheid state’ and described Hamas’s violence as ‘not unexpected’. Furthermore, she previously proposed accusing the United States of international crimes for President Donald Trump’s actions related to Iranian nuclear facilities.
Albanese has also voiced criticism against American defense technology companies. She has faced accusations of antisemitism, particularly for a past remark suggesting US foreign policy was controlled by a ‘Jewish lobby’, though she later retracted this comment.4
Anne Bayefsky, President of the human rights organization Human Rights Voices, welcomed the sanction, stating, “The US has finally taken action. This measure against Albanese’s incitement to violence and her attempts to deny Israel’s existence is timely.”
Israel also welcomed the sanctions. Israeli Foreign Minister Gideo Sa’ar remarked, “It is time for the UN to open its eyes.” Danny Danon, Israel’s UN envoy, added that Albanese had “damaged the credibility of the United Nations.”
Hillel Neuer, Executive Director of UN Watch, called it a “courageous decision,” noting that a UN official had never before been sanctioned in this manner.
There has been no immediate reaction from the United Nations regarding the sanction.
Twelve Turkish soldiers have died after inhaling methane gas during a mission in a cave in northern Iraq, the Turkish Ministry of National Defense announced on Monday. The incident occurred on Sunday during an operation to recover the remains of a soldier who went missing in the cave in 2022 after being killed by Kurdistan Workers’ Party (PKK) fighters.
“Four other of our heroic comrades in arms, affected by methane gas, have died … bringing the total number of victims to 12,” the ministry stated in a post on X. Nineteen soldiers were exposed to the gas inside a site previously used as a hospital by armed fighters. The condition of the remaining seven soldiers was not immediately clear, though Turkish Interior Minister Ali Yerlikaya wished them a speedy recovery on X.
The soldiers were conducting a sweep operation inside a cave at an altitude of 852 meters (2,795 feet) in the Metina region. This mission is part of Turkiye’s ongoing Operation Claw-Lock, which targets PKK positions in northern Iraq. The PKK is designated as a terrorist group by Turkiye, the European Union, and the United States.
While methane gas is not considered toxic, it can be deadly in confined spaces due to the risk of suffocation. The ministry has not yet clarified how the gas accumulated inside the cave.
Turkish President Recep Tayyip Erdogan expressed his “great sorrow” over the incident and extended condolences to the families of the fallen soldiers. Defense Minister Yasar Guler has traveled to the area to oversee inspections and attend ceremonies for the deceased.
Japan has conducted its first-ever land-to-ship missile test within its own territory, a move the Ministry of Defense described as “extremely important for enhancing military capability in the current difficult security situation.”
The ‘Type-88’ missile was test-fired by the Japan Ground Self-Defense Force (JGSDF) from a military base on the northern island of Hokkaido on Tuesday (local time), hitting an area off the Pacific coast, according to Agence France-Presse (AFP). Traditionally, Japan has conducted such live-fire drills at U.S. military bases, but these are often expensive and involve a limited number of personnel. The decision to conduct drills domestically comes as a weaker Japanese Yen has further increased these costs.
Chief Cabinet Secretary Yoshimasa Hayashi stated in a Wednesday press briefing that conducting live-fire exercises at home allows for the training of a greater number of troops and aids in the defense of islands and other areas. While he maintained the exercise was not directed at any specific country, Japan has previously identified China as its “biggest security threat.”
Experts suggest that Beijing’s push for regional dominance, particularly its assertive stance on Taiwan, has led Japan to significantly alter its defense strategy. Japan is currently working towards a long-term plan to increase its defense budget to 2% of GDP, aligning with NATO standards. Concurrently, it is strengthening its military alliance with the United States to enable a swift response to regional tensions and potential threats.
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