Dynamics in Turkish Housing Market

Abstract

The recent economic crises of the summer 2018 has led to hiking foreign currency prices and an increased risk perception. Moreover, promising returns of alternative investments has convinced investors to refrain from the housing market and the demand in real estate market has fallen significantly. Measuring the demand for housing precisely is crucial for overcoming economic difficulties as well as understanding the profitability, liquidity and the future of construction sector in Turkey. In this study, significant factors that have impact on the demand for real estate market are assumed to be dynamic. Different regimes are formed based on interest rates and factors like housing prices, location, mortgage rates, bond rates, foreign currency returns, gold returns and iron prices are used to test the changes in the demand for real estate.