Istanbul Chamber of Commerce releases the Cost of Living Index each month, then we wait for the CPI figures and those announced by the TurkStat. Both indexes used to be very similar to each other for many years. But recently, the gap between them has been getting larger, depending on the circumstances.
In April, Wage Earners Cost of Living Index in Istanbul increased by 4.57% compared to the previous month, while the Wholesale Price Index went up by 3.14%. The rate of change compared to the same month of the previous year is 62.46% for the former and 70.58% for the latter.
The house prices and rents in Istanbul reached astronomical levels. At this rate, not a single local resident will be left in the city’s neighbourhoods.
“…Two years ago, I made the following comment at a TV broadcast: “Soon there will not be many ‘natives’ or ‘locals’ left in the central neighbourhoods. Because of astronomical rents, no one will be able to afford living in neighbourhoods where they were born. People who were born and raised in the city will have to move to the outskirts of the city where rents are more reasonable. This relocation will change the cultural and social texture of the city drastically.”
“TurkStat shouldn’t compromise its institutional integrity for the sake of low inflation.”
April consumer spending in Istanbul has increased overall when compared to the previous month: 29.04% in ready garment, 11.97% in culture, education and entertainment, 3.87% in food, 2.32% in household goods, 1.68% in housing, and 1.32% in transportation and communication.
The wholesale prices have also increased compared to the previous month: raw materials by 16.25%, textiles by 3.35%, construction materials by 2.96%, and the whole price of food items went up by 0.76%. Recently, a participant at a conference asked me, “Should we continue to make buildings?”. “Find the buyer first and collect your money”, I answered his question. It is indeed difficult to not to get buried under ever-increasing construction costs.
In short, it is getting harder to live in cities, but I think that the prices are steadily increasing in rural areas as well. Only because people in rural areas have a lot less details to deal with, they can manage to sustain themselves. Living in a big city comes with its costs but it offers the possibility of earning high income. In rural settings, on the other hand, both expenses and income are low. The resort towns preferred by remote working professionals are also expensive. In places with strong technological infrastructure, the cost of living is always very high.
Considering the fact that the Istanbul Chamber of Commerce has revealed a figure of 4.5%, a PPI data by TurkStat that is half of this rate would make it quite difficult for the institution to be taken seriously.