How many kilograms of 200-lira banknotes are needed to buy an apartment in Istanbul?
High inflation and the rising dollar exchange rate are eroding the Turkish Lira day by day. One in every three banknotes in circulation is now a 200-lira note. To buy an average apartment in Istanbul, one would need to carry 27 kilograms of 200-lira banknotes.
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The cost of living and high inflation are multiplying living expenses, especially in major cities like Istanbul. Housing prices and rents continue to skyrocket every day.
According to TUIK data, prices in Turkey increased by exactly 950 percent between January 2009 and August 2023. In other words, to buy the same basket of goods that you could have purchased for 200 liras back then, the amount of money you need to take out of your pocket today exceeds 2,000 liras.
In a period where such significant changes are occurring in Turkey, what has remained abnormally stagnant is the banknotes. In January 2009, the largest banknote was 200 liras. It still is. The need for banknotes suitable for Turkey's new price level has been voiced for a long time. However, in recent times, the issuance of new banknotes has turned from a need into a necessity. So much so that it is no longer practical to conduct large transactions, such as buying a house or a car, in cash using liras. While carrying money in sacks was once a rare occurrence, it has now become a common sight in the normal flow of life. The fact that the largest banknote has become the most common one has not alleviated this situation.
When the 200-lira note was first introduced, its share of total banknotes was only 3.2 percent. As of September, this rate exceeded 35 percent. In terms of value, 200-lira notes account for 66.4 percent of the total banknotes in circulation. When combined with 100-lira notes, this rate rises to 93 percent. Under normal conditions, it is not expected for the highest and lowest denomination banknotes to be this prevalent in an economy. However, Turkey is in a unique position in this regard.
ONE APARTMENT = 3.8 KILOMETERS OF 200 TL NOTES
According to a report by BloombergHT, the average housing price in Istanbul has exceeded 4 million 750 thousand liras according to Central Bank data. In good neighborhoods, the price of new apartments is many times higher than the average price. If we take the average price as a basis, exactly 23 thousand 750 of the largest paper note, the 200-lira note, are required for an apartment to change hands.
This means that to buy a standard apartment in Istanbul, you need 3.8 kilometers of 200-lira notes lined up one after another. The weight of this money reaches 27 kilograms, and the space it occupies is 274 square meters. The same situation applies to vehicle purchases and jewelry purchases.
The new price levels, especially in the service sector, make the use of the Turkish Lira with existing banknotes difficult in daily life as well. For example, a dinner for two at an average restaurant in Istanbul easily reaches 3-4 thousand liras. For someone who wants to use cash, the obligation to carry at least 20 paper notes just for a restaurant bill causes wallets to become increasingly thick.