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.

KYIV/LVIV, Ukraine, March 16 (Reuters) – Russia and Ukraine both emphasized new-found scope for compromise on Wednesday as peace talks were set to resume three weeks into a Russian assault that has so far failed to topple the Ukrainian government.

Ukraine’s President Volodymyr Zelensky said the talks were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov said there was “some hope for compromise”, with neutral status for Ukraine – a major Russian demand – now on the table.

The Kremlin said the sides were discussing status for Ukraine similar to that of Austria or Sweden, members of the European Union that are outside the NATO military alliance.

Three weeks into the invasion, Russian troops have been halted at the gates of Kyiv, having taken heavy losses and failed to seize any of Ukraine’s biggest cities in a war Western officials say Moscow thought it would win within days.

Ukrainian officials have expressed hope this week that the war could end sooner than expected – even within weeks – as Moscow was coming to terms with a lack of fresh troops to keep fighting.

Talks were due to resume on Wednesday by video link for what would be a third straight day, the first time they have lasted more than a single day, which both sides have suggested means they have entered a more serious phase.

“The meetings continue, and, I am informed, the positions during the negotiations already sound more realistic. But time is still needed for the decisions to be in the interests of Ukraine,” Zelensky said in a video address overnight.

On Tuesday, Zelenskiy had hinted at a possible route for a compromise, suggesting Ukraine would be willing to accept international security guarantees that stopped short of its longstanding hope for full admission to the NATO alliance.

Keeping Ukraine out of NATO was long one of Russia’s main demands, in the months before it launched what it calls a “special operation” to disarm and “denazify” Ukraine.

“The negotiations are not easy for obvious reasons,” Lavrov told media outlet RBC news. “But nevertheless, there is some hope of reaching a compromise.”

“Neutral status is now being seriously discussed along, of course, with security guarantees,” Lavrov said. “Now this very thing is being discussed in negotiations – there are absolutely specific formulations which in my view are close to an agreement.”

Kremlin spokesman Dmitry Peskov said a demilitarised Ukraine with its own army, along the lines of Austria or Sweden, was being looked at as a potential compromise. They are the biggest of six EU countries that are outside NATO.

“This is a variant that is currently being discussed and which could really be seen as a compromise,” Peskov was quoted as saying by RIA news agency.

The head of Ukraine’s negotiating team, Zelenskiy’s aide Mykhailo Podlolyak, tweeted ahead of Wednesday’s resumption of talks that Ukrainian military counteroffensives had “radically changed the parties’ dispositions”.

1/10

A resident walks through debris next to a building that was hit by shelling, as Russia’s attack on Ukraine continues, in Kyiv, Ukraine March 16, 2022. REUTERS/Thomas PeterRead More

In an intelligence assessment released on Wednesday, Britain said Russian forces were trapped on roads, struggling to cope with Ukrainian terrain and suffering from a failure to gain control of the air.

“The tactics of the Ukrainian Armed Forces have adeptly exploited Russia’s lack of maneuver, frustrating the Russian advance and inflicting heavy losses on the invading forces,” it said.

THREE MILLION REFUGEES

Europe’s biggest invasion since World War Two has destroyed some Ukrainian cities and sent more than 3 million refugees fleeing abroad.

The streets of the capital Kyiv were largely empty on Wednesday after authorities imposed a curfew overnight. Several buildings in a residential area were badly damaged after what appeared to be a Russian missile was shot down in the early hours of Wednesday, residents and emergency workers said.

There was no immediate word on casualties as a specialist rescue team searched for signs of life amid the rubble. Surrounding streets were covered with broken glass from hundreds of windows shattered in a wide area. What appeared to be a motor from the missile lay twisted on the roadside.

Still, Ukrainian forces have withstood an assault by a much larger army. Zelenskiy said Ukrainian troops had killed a fourth Russian major general in the latest fighting. Reuters was not immediately able to verify his statement.

“The occupiers were not successful today, although they threw thousands of their people into battle, in the north, in the east, in the south of our state. The enemy lost equipment, hundreds more soldiers. A lot of dead Russian conscripts, dozens of officers.”

Ukraine said about 20,000 people had managed to escape the besieged port of Mariupol in private cars, but hundreds of thousands remain trapped under relentless bombardment, many without heating, power or running water.

Deputy Prime Minister Iryna Vereshchuk said it was not clear whether the humanitarian corridor to the city would open on Wednesday. She said 400 staff and patients hostage was being held hostage at a hospital Russian forces had captured in Mariupol on Tuesday.

The prime ministers of Poland, the Czech Republic, and Slovenia were due home on Wednesday after an overnight journey out of Kyiv by train. They met Zelenskiy in the Ukrainian capital on Tuesday in the first visit of its kind since the war began, a symbol of the Ukrainian administration’s success so far in withstanding the Russian assault.

Zelenskiy was due to address the U.S. Congress later on Wednesday by video link, having made similar appearances in parliaments across Europe. The White House said U.S. President Joe Biden would make his first visit to Europe since the invasion next week to discuss the crisis with NATO allies.

The conflict has brought economic isolation upon Russia and the economic cost was fully exposed on Wednesday, as its sanctions-ravaged government teetered on the brink of its first international debt default since the Bolshevik revolution.

Moscow was due to pay $117 million in interest on two dollar-denominated sovereign bonds it had sold back in 2013, but it faces limits on making payments and has talked of paying in roubles, which would trigger a default. 

LVIV/IRPIN, Ukraine, March 7 (Reuters) – Ukrainian officials said a bread factory had been hit by a Russian air strike on Monday as the country’s negotiators assembled for talks with Russian officials after previous rounds that brought no respite in the conflict.

The bodies of at least 13 civilians were recovered from the rubble after a factory in the town of Makariv in the Kyiv region was hit, local emergency services said. Five people were rescued off the 30 believed to have been there at the time. Reuters was not immediately able to verify the reported attack.

Russia earlier offered Ukrainians escape routes to Russia and its close ally Belarus on Monday after weekend evacuation ceasefire attempts failed. In the besieged southern port city of Mariupol, hundreds of thousands of people remained trapped without food and water under regular bombardments.

A Ukrainian negotiator urged Russia to stop its assault on Ukraine, which the United Nations said had sent 1.7 million people fleeing to Central Europe.

“In a few minutes, we will start talking to representatives of a country that seriously believes large-scale violence against civilians is an argument,” Ukrainian negotiator Mykhailo Podolyak said on Twitter. “Prove that this is not the case.”

Under the Russian offer, a corridor from the capital Kyiv would lead to Russia’s ally Belarus, while civilians from Kharkiv, Ukraine’s second biggest city, would be directed to Russia, according to maps published by the RIA news agency.

“Attempts by the Ukrainian side to deceive Russia and the whole civilised world…are useless this time,” the Russian defence ministry said after announcing the “humanitarian corridors”.

A spokesperson for Ukrainian President Volodymyr Zelenskiy said the Russian proposal was “completely immoral”.

“They are citizens of Ukraine, they should have the right to evacuate to the territory of Ukraine,” the spokesperson said.

A day earlier, Reuters journalists had witnessed people trying to flee the town of Irpin near Kyiv getting caught in Russian shelling.

On Monday people picked their way over the twisted ruins of a large bridge in Irpin, with river water rushing just beneath them.

“It’s like a disaster. The city is almost ruined and the district where I’m living (there are) no houses which were not bombed,” a young woman leaving with her children told Reuters.

Russia denies deliberately targeting civilians. It calls the campaign it launched on Feb. 24 a “special military operation” to disarm Ukraine and remove leaders it describes as neo-Nazis. Ukraine and its Western allies call this a transparent pretext for an invasion to conquer a nation of 44 million people.