<abstract xmlns="http://www.w3.org/1999/xhtml"><p> There was a notable housing price inflation in aggregate/local levels in Turkey during the last few years. Although the country’s economic fundamentals remain strong, the probability of a housing bubble is a heated debate among market participants. This timely investigation brings greater clarity to whether the Turkish housing market is in a bubble. The study uses a multi-strand approach to dissect the bubble over the period of Jan. 2010 - Dec. 2014. First, monthly/annual price-to-income and monthly price-to-rent ratios are examined for the national Turkish as well as regional Istanbul, Izmir and Ankara housing markets. Second, an extended CASE and SHILLER (2003) model is applied assessing the interdependence between housing prices and a series of explanatory variables. Lastly, the Right Tail Augmented Dickey-Fuller (Rtadf) test is performed to support the overall analysis. This study finds that neither affordability ratios nor regression estimates support the existence of the bubble in Turkey.</p></abstract>

There was a notable housing price inflation in aggregate/local levels in Turkey during the last few years. Although the country’s economic fundamentals remain strong, the probability of a housing bubble is a heated debate among market participants. This timely investigation brings greater clarity to whether the Turkish housing market is in a bubble. The study uses a multi-strand approach to dissect the bubble over the period of Jan. 2010 - Dec. 2014. First, monthly/annual price-to-income and monthly price-to-rent ratios are examined for the national Turkish as well as regional Istanbul, Izmir and Ankara housing markets. Second, an extended CASE and SHILLER (2003) model is applied assessing the interdependence between housing prices and a series of explanatory variables. Lastly, the Right Tail Augmented Dickey-Fuller (Rtadf) test is performed to support the overall analysis. This study finds that neither affordability ratios nor regression estimates support the existence of the bubble in Turkey.

Is there a Housing Bubble in Turkey?

United Kingdom of Great Britain and Northern Ireland

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Is there a Housing Bubble in Turkey?"}

There was a notable housing price inflation in aggregate/local levels in Turkey during the last few years. Although the country’s economic fundamentals remain...

Is there a Housing Bubble in Turkey?

Published Online: Apr 12, 2017

Page range: 48 - 73

DOI: https://doi.org/10.1515/remav-2017-0003

Keywords
Housing bubble, regression analysis, affordability ratios, Rtadf, Turkish housing market, Istanbul housing market

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Is there a Housing Bubble in Turkey?

Published Online: Apr 12, 2017

Page range: 48 - 73

DOI: https://doi.org/10.1515/remav-2017-0003

KeywordsHousing bubble, regression analysis, affordability ratios, Rtadf, Turkish housing market, Istanbul housing market

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Housing bubble, regression analysis, affordability ratios, Rtadf, Turkish housing market, Istanbul housing market