Owning a home in Istanbul is becoming a dream: Minimum wage earner's dream of a home pushed back by 346 months
Inflation and high interest rates are making homeownership increasingly difficult. According to TurkStat data, homeownership rates have decreased while rental rates have increased between 2010 and 2023. In Istanbul, the price of 1 square meter of housing was 1,573 TL in 2010, reaching 49,000 TL in 2024. An average 120-square-meter home, which cost 188 thousand TL in 2010, has reached 5.88 million TL in 2024.
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While the rise in inflation makes owning a home increasingly difficult, the addition of rising interest rates in the fight against inflation to the increase in housing prices also makes loans difficult, especially for those living on fixed incomes and experiencing a decline in purchasing power.
In its "Poverty and Living Conditions Statistics" data, TurkStat shows that homeownership decreased between 2010 and 2023, while the decline in housing opportunities for civil servants also supports the rise in rental rates.
According to CBRT data in Istanbul, while the Residential Property Price Index (RPPI) per square meter was 1,573 TL in 2010 (1st quarter), it is seen that the price of 1 square meter of a home in Istanbul is 49,000 TL in 2024 (2nd quarter).
According to the report by Özder Şeyda Uyanık from Ekonomim, an average 120-square-meter home cost 188 thousand 760 liras in 2010, while by 2024, it has reached 5 million 880 thousand liras. The increase is over 3 thousand percent in 14 years.
The dollar/TL exchange rate, again according to CBRT data, was 1.51 TL in 2010, while it is at the 32.36 TL level in 2024.
A 188 THOUSAND LIRA HOME CAN BE PURCHASED IN 150 MONTHS
A home that was at the 125 thousand dollar level in 2010 is 181 thousand 705 dollars in 2024. Although the increase remains at a modest level of 45 percent in dollar terms, the fact that inflation in the US was 44.36 percent during this period is also an indicator of the loss of value in the TL.
In 2010, the lowest civil servant salary rose to 1,254 liras after inflation rates were announced. Thus, one could purchase a 188 thousand 760 lira home in 150.5 months.
In 2024, a civil servant receiving the lowest salary of 39 thousand 177 liras, after receiving the inflation adjustment increase determined by contracts in July 2024, can purchase a 5 million 880 thousand lira home in 150 months.
While a 188 thousand 760 lira home could be purchased in 276 months with the lowest pension of 683 TL in 2010, a 5 million 880 thousand lira home can be purchased in 470 months with the lowest pension of 12 thousand 500 liras in 2024. The retiree is forced to work for 194 months longer.
THE TIME TO BUY A HOME FOR A MINIMUM WAGE EARNER HAS INCREASED FROM 259 TO 346 MONTHS
It is seen that the minimum wage was 729 liras in 2010. While a minimum wage earner had to work for 259 months to buy a home in Istanbul, a minimum wage earner earning 17 thousand 2 liras in 2024 can own a home in 346 months by working 87 months more.
Things also change in the calculation made based on purchasing a home with a 20 percent down payment and an 80 percent loan over a 120-month term based on housing loan interest rates.
While the monthly installment was 2,156 TL based on housing loan interest rates, which averaged 0.99 percent in 2010, the loan installment, which was 1.7 times the civil servant's salary, is seen as 3 times the pension and 2.95 times the minimum wage.
In 2024, while the monthly installment is 173 thousand 603 liras based on an average interest rate of 3.64 percent, it corresponds to approximately 4.4 times the lowest civil servant salary, approximately 13.8 times the lowest pension, and approximately 10 times the minimum wage.