The dynamics of house prices and fiscal policy shocks in Turkey

Yıldırım, Mustafa Ozan; Yağcıbaşı, Özge Filiz

doi:10.2298/eka1920039o

Cited by 6 publications

(6 citation statements)

References 20 publications

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“…Many studies found out that interest rates are effective on housing inflation or housing prices. This finding is consistent with the following studies that we included in the literature review chapter: Sari et al (2007), Badurlar (2008), Öztürk and Fitöz (2009), Lebe and Akbaş (2014), Akkas and Sayilgan (2015), Dilber and Sertkaya (2016), Afşar (2018), İslamoğlu and Buluş (2018), Yıldırım and Yağcıbaşi (2019), Kılcı (2019) and Karadaş and Salihoğlu (2020).…”

Section: Findings and Discussionsupporting

confidence: 89%

“…In the study of İslamoğlu and Buluş (2018), it was observed that there was a negative relationship between house prices and mortgage interest rates for the period 2007:Q1-2017:Q2. Yıldırım and Yağcıbaşi (2019) found that the increase in loan rates in the long term caused an increase in housing prices, albeit small in a study conducted with quarterly data of 2010: Q1-2017: Q4. Kılcı (2019) analyzed the relationship between housing loan interest rates and mortgaged housing sales using the monthly data of 2013:01–2018:12, using the Fourier SHIN cointegration test and the Fourier Granger causality test.…”

Section: Theoretical and Empirical Literaturementioning

confidence: 92%

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Determinants of housing inflation in Turkey: a conditional frequency domain causality

Kırca

Canbay

2021

IJHMA

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Purpose This study aims to investigate whether changes in consumer interest rate, exchange rate and housing supply have permanent effects on housing inflation in Turkey. Design/methodology/approach For this purpose, data from 2010M01 to 2020M06 and changes in consumer interest rate, exchange rate, housing supply and housing inflation were used. Relationships between variables are analyzed first by the Granger causality tests and then the conditional frequency domain causality tests. The conditional frequency domain causality test specifically reveals the permanent causality between variables, whether there is a permanent effect. Findings According to the Granger causality test results, there are causality relationships from changes in the consumer interest rate and exchange rate to housing inflation. However, there is no causality relationship between housing supply and housing inflation. According to the conditional frequency domain causality test results, there is causality for the permanent and mid-term from changes in the consumer interest rate to housing inflation and causality for the mid-term and temporary from changes in the exchange rate to housing inflation. Additionally, it was found that there are causality relationships between changes in the consumer interest rate and changes in the exchange rate. Research limitations/implications The first limit of the study is that only 2010M01-2020M06 months can be considered. Because the date that variables started common is 2010M01. Besides, there is a limit in the study in variables used. Many variables, both micro and macro, can be added to affect housing inflation. Originality/value Housing inflation is a remarkable issue in Turkey. There is an increase in the number of studies on the subject in recent years. For this reason, the study is trying to contribute by approaching the subject from a different angle. The most important contribution of the study is that it has not been investigated whether the determinants of housing inflation have permanent or temporary effects, which were not done in previous studies. In addition, the method used reveals how many months the effects of changes in exchange rates, consumer interest rates and housing supply on housing inflation last. Based on the findings obtained from the methods, important economic and political implications have been put forward in depth.

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Section: Findings and Discussionsupporting

confidence: 89%

Section: Theoretical and Empirical Literaturementioning

confidence: 92%

Determinants of housing inflation in Turkey: a conditional frequency domain causality

Kırca

Canbay

2021

IJHMA

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“…Although the HPI (House Price Index) created by the CBRT is usually used as an indicator of house prices, the price index constructed by the REIDIN company has also been used in a small number of studies (for example, Hepşen and Aşıcı, 2013;Erdem et al, 2013, Coşkun et al, 2020. Some of these studies focus on the relationship between house prices and a particular variable (housing credit rate in Akkaş and Sayılgan, 2015;Akpolat, 2020; construction sector confidence index in Çetin and Doğaner, 2017; inflation rate in Sağlam and Abdioğlu, 2020; real exchange rate in Eryüzlü and Ekici, 2020), while other papers examine the relationship between house prices and a battery of macroeconomic variables (see inter alia, Hepşen and Aşıcı, 2013;Karamelikli, 2016;Dilber and Sertkaya, 2016;Yıldırım and İvrendi, 2017;Akkaya, 2018;Kolcu and Yamak, 2018;Yıldırım and Yağcıbaşı, 2019;Bayır et al, 2019;Gebeşoğlu, 2019;Coşkun et al, 2020;Karadaş and Salihoğlu, 2020). On the other hand, there are also regionallevel studies that can be considered as mezzo-scale (for example, Kayral, 2017;Karaağaç and Altınırmak, 2018;Sağlam and Abdioğlu, 2020).…”

Section: Related Empirical Literaturementioning

confidence: 99%

Impact of Macroeconomic Factors on Housing Prices: An Analysis for Aegean Region

Karagöz¹,

Özkubat²

2021

Journal of Yaşar University

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In this study, macroeconomic factors which affect the change in house prices have been tried to be determined at two digit level in the Aegean region where rapid population increase observed due to industrialization and intensive immigration activity in recent years. In the analysis in which the House Price Index constructed by the CBRT used as the dependent variable, gold price, stock market index, TL/Euro exchange rate, housing loan interest rate, consumer confidence index for housing sector and regional consumer price index were used as exploratory variables.The existence of the co-integration relationship between the variables was investigated by the ARDL Bound test and it was found that there is a significant relation between the variables in the long term for all three subregions. Co-integrated regression coefficients were estimated through FMOLS, DOLS, and CCR methods. According to the estimation results, house prices in İzmir (TR31) are affected by gold and general price level. In the Aydın sub-region (TR32) gold price, exchange rate, interest rate, population and general price level have significant effect. In the Manisa sub-region (TR33) exchange rate, interest rate and general price level are the main variables affecting housing prices.

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“…The Bank for International Settlement (2022) further noted that in the third quarter of 2021, global residential property prices accelerated to 5.5% yearly in real terms, the greatest since the eve of the 2007/2008 global financial crisis. The boom and bust of house prices were attributed to changes several monetary policy proxies such as interest rates (Baily et al , 2008; Dieckelmann et al , 2023; Jordà et al , 2015; Dullien et al , 2008; Shi et al , 2014), conditions of obtaining mortgage finance (Karley, 2006; Koblyakova et al , 2021) and other factors such as economic growth (Agnello and Sousa, 2009; Khan et al , 2014; Yildirim and Yağcibaşi, 2019). Given the potential impact monetary policy variables have on residential property prices, the paper addresses the question of how the current monetary policy regime in South Africa has managed to influence residential property prices in the short and long run.…”

Section: Introductionmentioning

confidence: 99%

Short-run dynamics and long-run effects of monetary policy on residential property prices in South Africa

Mwanyepedza,

Mishi

2023

IJHMA

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Purpose The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary policy shift, from targeting money supply and exchange rate to inflation. The shifts have affected residential property market dynamics. Design/methodology/approach The Johansen cointegration approach was used to estimate the effects of changes in monetary policy proxies on residential property prices using quarterly data from 1980 to 2022. Findings Mortgage finance and economic growth have a significant positive long-run effect on residential property prices. The consumer price index, the inflation targeting framework, interest rates and exchange rates have a significant negative long-run effect on residential property prices. The Granger causality test has depicted that exchange rate significantly influences residential property prices in the short run, and interest rates, inflation targeting framework, gross domestic product, money supply consumer price index and exchange rate can quickly return to equilibrium when they are in disequilibrium. Originality/value There are limited arguments whether the inflation targeting monetary policy framework in South Africa has prevented residential property market boom and bust scenarios. The study has found that the implementation of inflation targeting framework has successfully reduced booms in residential property prices in South Africa.

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The dynamics of house prices and fiscal policy shocks in Turkey

Cited by 6 publications

References 20 publications

Determinants of housing inflation in Turkey: a conditional frequency domain causality

Determinants of housing inflation in Turkey: a conditional frequency domain causality

Impact of Macroeconomic Factors on Housing Prices: An Analysis for Aegean Region

Short-run dynamics and long-run effects of monetary policy on residential property prices in South Africa

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