Turkey’s annual inflation has been soaring to record-high levels since the currency devaluation triggered by interest rate cuts last year.

Inflation remains to be the consistent driver of exchange rates this month along with a few new factors.

Many countries that were maintaining steady interest rates have decided to increase them due to rising consumer prices.

Since the outbreak of COVID-19, the overwhelming majority of housing surveys I’ve conducted revealed similar impacts on expatriate rental markets. In countries all around the world, the sudden and significant decline in demand has either pushed prices down or allowed for increased negotiability from listing prices. However, there has been one notable exception to that trend – Turkey.

Western rideshare apps have struggled in Turkey. Protests by taxi drivers and government opposition have left these ridesharing companies in a state of uncertainty over the last year. On my recent trip to Ankara and Istanbul, I experienced this firsthand. In Ankara, I tried to use a popular local rideshare app but gave up because it was only available in Turkish despite claims that they support English-speaking users. Apart from the local rideshare app, there was no other rideshare presence in Ankara, and I was entirely reliant on local taxis.

Rents in Turkey decreased due to lower demand, the depreciation of the lira, and the economic conditions that resulted from recent government policies and security concerns. A recent change in lease laws required that all contracts be signed and paid in Turkish lira (TRY) instead of USD or EUR.

For many years, the expatriate rental market in Turkey has been dominated by leases signed and paid in USD or EUR. In September of this year, President Erdogan issued a decree stating that all leases in foreign currency must be converted to Turkish lira (TRY). This move was made to stem the sharp inflation that battered Turkey’s currency in 2018, resulting in a loss of over half its value at its worst point.

The Turkish lira has had a volatile year and an especially tumultuous past week. In July, the Central Bank of Turkey alarmed investors by keeping interest rates steady even as CPI annual inflation rose to double digits.

Today, many expatriates from Western Europe and North America have stopped coming to Istanbul and to Turkey overall.