Turkey Housing Costs Hit 29.3% of Household Budget
Turkey's cost-of-living squeeze tightened. TurkStat data showed housing and rent took 29.3 percent of household spending in 2025 -- 39 percent for the poorest -- as housing costs rose 46.6 percent year-on-year and the Iran war pushed annual inflation back to 32.4 percent in April, while car sales fell 22.55 percent in May. Abroad, Ankara joined seven other Muslim-majority states in condemning Israeli settler incursions at Al-Aqsa, governing ally Devlet Bahceli urged an Islamic "Jerusalem Pact," and Turkiye, Georgia and Azerbaijan opened full operations on the Baku-Tbilisi-Kars rail corridor.
TurkStat data published June 2 showed housing and rent rose to 29.3 percent of total Turkish household consumption in 2025, from 26 percent a year earlier, with housing costs up 46.6 percent year-on-year even as broader inflation eased. The burden fell unevenly: the poorest households spent 38.7 percent of their budgets on housing and 29.2 percent on food, against 25.7 percent and 12.4 percent for the richest, and single-person households put 41 percent toward shelter. Transportation (20.5 percent) and food (17.3 percent) followed. Officials tied the renewed price pressure to the Iran war, which pushed annual consumer inflation back to 32.4 percent in April.
The squeeze showed in consumer demand. Car and light-commercial-vehicle sales fell 22.55 percent year-on-year in May to 83,442 units, the Automotive Distributors and Mobility Association reported, with passenger-car sales down 23.19 percent to 65,386 and the slump dragging January-May volumes 7.4 percent lower, to 453,138. The figures sat awkwardly against President Erdogan's framing of 2026 as a year of reform, with Ankara's return to orthodox monetary policy having steadied the lira but not yet eased the cost of living.
On foreign policy, Turkiye joined the foreign ministers of Egypt, Indonesia, Jordan, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates in a June 2 joint statement condemning incursions by extremist Israeli settlers into the Al-Aqsa Mosque compound in occupied East Jerusalem -- carried out under Israeli force protection and including the raising of Israeli flags -- as provocative violations of international law, and reaffirmed support for a two-state solution with East Jerusalem as the Palestinian capital. Devlet Bahceli, leader of the Nationalist Movement Party (MHP) and an ally of the ruling AK Party, went further, urging the Islamic world to unite against Israel and proposing a "Jerusalem Pact" as a new regional power centre.
On trade, Turkiye, Georgia and Azerbaijan marked the launch of full-capacity operations on the Baku-Tbilisi-Kars (BTK) railway at a ceremony in the Georgian town of Akhalkalaki, attended by Turkish Transport Minister Abdulkadir Uraloglu, Georgian Prime Minister Irakli Kobakhidze and Azerbaijani Minister Rashad Nabiyev. The line, opened in 2017, cuts freight times between China and Europe to around 15 days, more than twice as fast as the sea route -- a connectivity play that fits Ankara's bid to position itself as a Eurasian transit hub.