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 Low-income families in Turkey started submitting applications for a massive social housing project that President Recep Tayyip Erdogan described as the largest such initiative in the history of the country currently in the grip of rising inflation.

The five-year project was announced by Erdogan on Tuesday, as the government battles rising housing and rental costs as well as a 24-year-high inflation rate of more than 80 per cent in August, reports Xinhua news agency.

Under the project, 500,000 homes and 250,000 residential plots will be provided to eligible applicants whose monthly income is less than 18,000 liras ($990) in Istanbul and 16,000 liras in other provinces.

According to local media, the project will cost the government close to $50 billion.

Priority would be given to pensioners, young people, newlyweds, army veterans, relatives of soldiers killed in combat and the disabled, according to Erdogan.

More than 250,000 people have submitted their applications on the first day of its launch on Wednesday, according to Environment, Urbanization and Climate Change Minister Murat Kurum.

In Istanbul, the country largest city of 16 million people, long queues of applicants were seen outside public banks.

The project was launched at a time when housing and rental costs throughout the country, particularly in the major cities, were rising rapidly.

Housing prices increased by 160 per cent in June compared to a year earlier, according to the Turkish Central Bank's latest Housing Price Index.

The growth rate was 184 per cent in Istanbul and 165 per cent in Ankara.

According to the Turkish Statistical Institute, around 820,300 homes were sold from January to July this year, a 24.2 per cent increase year on year despite high borrowing rates and rising home prices.

Many households invest in homes, cars, and durable household goods amid the lira's depreciation since the beginning of 2021.

Interest rate cuts by the central bank, demanded by Erdogan who supports low interest rates, have had a profound impact on the country's economy and increased demand for real estate projects.

As Turkey is heading toward its presidential and parliamentary elections in June 2023, some analysts believe the launch of the housing project will help win the low-income households' votes.