The cost of living in Turkey with an analytical view
Although Right Home specializes in selling real estate in Turkey in general and in Istanbul in particular, many of our customers want to know the cost of living in Turkey, whether their goal is to live with their families or their goal is to buy investment properties with the aim of reselling them later or renting them. Therefore, we have devoted an article today to talk about the cost of living in Turkey and to answer the most frequently asked questions about this topic, but before we start with these questions, an analytical look at the level of salaries in Turkey, as well as the rate of inflation and its impact on the consumer, and finally the change of the Turkish lira's exchange rate against the dollar over the last ten years because most of our clients are foreign investors with a foreign currency and are interested in knowing the answers of today's questions regarding a foreign currency, let it be the dollar.
We start with the first question: What is the minimum wage in Turkey?
Many of our customers who want to live in Turkey are interested in knowing the minimum wages in order to estimate the expenses necessary for them and their families when settling in Turkey, we will attach this table below to know the minimum wages from 2003 until 2019 in Turkish lira and in dollars as well.
We note from the table that the minimum wage for a person in Turkey was in 2003 equivalent to $161 and in 2019 it reached $420, and the increase during these years was based on the rate of inflation, which we will talk about shortly. Here we have several notes before we move on to the next question.
- These salaries represent the smallest limit that can be granted for a licensed official work, and they do not represent the average salaries in Turkey, but many Turkish citizens receive only the minimum wage.
- The Turkish family depends on the principle of working for both husband and wife in order to secure the family’s needs and thus to have a good life in Turkey for the year 2019, $420 is not enough, but if both husband and wife work and thus get at least $840 per month, it will be sufficient for a good life.
- Real estate prices, rents, and food commodities prices are not fixed in all parts of Turkey, as they reach their highest levels in large commercial cities, especially Istanbul, and their lowest levels in small rural cities, and therefore the minimum wage in Turkey is generally applied, but in a large city like Istanbul, most workers get an upper limit than the minimum wage.
The second question: What was the inflation rate during the last 15 years?
The inflation rates before 2002 were really high if they reached 125% in one year and generally recorded more than 50% annually, and with the beginning of the AKP's assumption of power and President Recep Tayyip Erdogan, the inflation rates decreased dramatically, to record between 2003 and 2018 an average of 9% annually. And in order to Turkey's ambition to reach the ten largest economies in the world in 2023, the government followed several measures to improve exports in addition to several political issues that Turkey faced that led to a significant decline in the value of the lira against the dollar in 2018, which led to an increase in the inflation rate in the same year by 25%, which in turn led to a clear increase in prices from 2018 until today, December 2020.
Here we move to the third question: What is the rate of a consumer price increase from 2018 to 2020?
The rate of consumer price increase in 2018 reached 25%, in 2019 to 8.55%, and in 2020 it reached about 12%. In fact, these rates are very huge, but it is worth noting that these increases are estimated in the local currency, which is the Turkish lira. In fact, we can, in an acceptable way, consider that the prices are fixed in Turkey in relation to the dollar, this means that the product that was valued at $10 (25 Turkish liras) in 2015, is the same today at $10 (80 Turkish liras) in 2020.
Thus, if your income is in dollars, it will not be affected by inflation rates.
And now we move on to the fourth question: What was the exchange rate of the Turkish lira against the dollar in the past ten years?
We can notice from the above graph that the rate of exchange of the Turkish lira against the dollar is very similar to the inflation curve that we talked about earlier, and this is something that is expected. It is worth noting that the recent statements and Turkey's plan for the next three years are reflected in the work to achieve economic stability and control the rate of inflation to be within the previous normal rates and work to achieve price stability as much as possible.
It was necessary for this previous introduction to understand the issue in a logical and analytical way away from the false claims that we hear about or see in the news, whether that living in Turkey is very cheap or very expensive, and we will now compare some commodity prices between 2010 and 2020, and in a later article we will talk about the cost of living in Turkey is in numbers, and thus the idea to be communicated will be completed in theory in today's article and practically in a subsequent article.
The price of a kilo of tea during the last ten years has increased from about 12 TL to 32.4 TL.
The price of a kilo of tomatoes has increased by almost 3 and a half times during the same period.
The price of a kilo of beef almost doubled during this period.
A kilo of bread has more than tripled over a ten-year period.
Olive oil doubled 3 times during the same period.
The price of eggs increased almost 4 times during the same period.
A kilo of full-fat white cheese increased from 13.3 lira to 31 pounds in 2020.
The price of gasoline has more than doubled in ten years.
The price of a full chicken has increased almost two and a half times.
Finally, the price of a kilo of garlic has increased 6 times over the past ten years.