Financial and Macroeconomic Impacts on Real Estate Prices of Turkiye: 2013 to 2023

Abstract

The period between 2013 and 2023 was extraordinary for the economy of Türkiye. The citizens felt that all of the negativities resulted from the 2023 Kahramanmaras earthquake, the attempt of a military coup in 2016 and COVID-19 pandemic. During these events, sustaining economic policies with healthy dynamics is not easy in terms of micro, macro and international dimensions. It is indispensable for multi-layered real estate markets to exist normally in such unpredictable times. This research mainly focuses on these situations and investigates the relationship between the macroeconomic variables and housing price index changes, which has been accepted as an important variable of price in the real estate market as a price indicator. Using the Markov switching regression model, it is found that inflation and unemployment impact the housing price index changes. On the other hand, another important finding of this research work is the statistical, negative and positive-sided (asymmetric) relationship between gross domestic product growth and housing price index changes. It can be concluded from these findings that the government, investors and consumers of the real estate markets have been subjected to challenging and difficult macro-periods; these extraordinary events have also been so destructive that the expectations, wishes and desires of the market participants are not easily met.