Demand-side factors of housing price increases in Turkey: Blanchard-Quah SVAR model

A bubble in the housing sector is defined as an unprecedented upsurge in house prices which cannot explained by fundamental determinants of the housing sector. This study examines demand-side factors of real estate sector in Turkey in order to expose whether house price increases in the country can be counted as a bubble. We use the Blanchard-Quah SVAR model to empirically reveal the relationships between the real mortgage interest rates, house price gap, price-rent-ratio and purchasing power parity. The results of the paper indicate that real interest rates and other variables have a significant explanatory power in the long run whereas house prices cannot be explained by these variables in the short run. Therefore it can be asserted that the house price increases in Turkey cannot be evaluated as a bubble in the long run.


Issue Date:
2017-2017-2017
Publication Type:
Journal Article
ISSN:
1804-1205
Language:
English
Published in:
Business and Economic Horizons (BEH), Volume 13, Issue 3
Page range:
312-332
JEL Codes:
C32; E27; E43; G12; R3




 Record created 2017-11-06, last modified 2017-11-06

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)