AN ANALYSIS OF THE HOUSING MARKET AND FIRST SALES OF HOUSE IN TURKEY

Abstract

The need for housing in Turkey has increased significantly due to the rapid population growth and migration from rural to urban areas as a result of industrialization that took place since the 1950s. Although there are many indicators in the literature that affect the housing market, different indicators have determined the demand for housing in different periods in this process. The aim of this study is to examine the relationship between the number of sales of new built house and the macroeconomic factors. The ARDL test has determined that the first sales, which are important for the construction and real estate sectors, which have a large share in the Turkish economy (2013-2020 period), are in long-term equilibrium with the New Housing Price Index (NHPI), Housing Loan Interest Rates (HLIR), Housing Loan Volume (HLV), Domestic Producer Prices Index (DPPI), and Industrial Production Index (IPI). In addition, an error correction model was applied to the variables and Granger’s causality analyzes were also performed. According to the results of the error correction model, it has been revealed that in case of moving away from the long-term equilibrium, the equilibrium state will reinstated after approximately 1.3 periods. According to Granger Causality analysis, HLIR, DPPI and NHPI are the Granger causes of first sales; in addition first sales is the Granger cause of HLV and NHPI.