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Why Did Housing Prices Rise to a Record Level in Turkey? An Empirical Analysis

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  • Yaşar Reha Z.

    (Department of Economics, Kirikkale University, Ankara Cd. 7. Km, 71450 Yahşihan/Kırıkkale, Turkey)

  • Bulut Erdem

    (Department of Economics, OSTIM Technical University, (Ministry of Trade of the Republic of Turkey), Ostim, 100. YılBlv 55/F, 06374 OstimOsb/Yenimahalle/Ankara, Turkey)

Abstract

Turkey is one of those countries where housing market has been most severely affected by COVID-19 pandemic. Today the effects of the outbreak have been eliminated significantly. This study retrospectively looks at the days when the world faced a widespread outbreak of a pandemic and investigates the effect of the pandemic and the changes in consumer confidence on housing prices and the volatility of housing prices. Considering the structural breaks in the analysis period (2010:q1-2022:q4 quarterly), we used the Lee and Strazicich structural break unit root test as a research method. The results show that an increase in costs due to a break in the supply chain and containment measures forcing the workforce to stay at home affected the housing supply adversely. It is observable that expansionary economic policies and social assistance programs have a positive effect on housing demand. In this regard, negative supply shock and positive demand pressure are seen to be the determinants of the recent housing price increases in Turkey. However, while there is a positive relationship between consumer confidence and house prices, the effect of house prices on the volatility is statistically insignificant.

Suggested Citation

  • Yaşar Reha Z. & Bulut Erdem, 2023. "Why Did Housing Prices Rise to a Record Level in Turkey? An Empirical Analysis," Real Estate Management and Valuation, Sciendo, vol. 31(4), pages 1-10, December.
    • Handle: RePEc:vrs:remava:v:31:y:2023:i:4:p:1-10:n:7
    DOI: 10.2478/remav-2023-0025
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; housing price; consumer confidence;
    All these keywords.

    JEL classification:

    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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