The Impact of earthquake risk upon housing prices in the riverbeds: Istanbul Sample

Year 2019, Volume: 5 Issue: 1, 11 - 31, 30.04.2019

Birol Alas

Abstract

This essay attempts to answer the question to what extent the impact of
earthquake risk upon housing prices differs between high-risk and low-risk
areas in riverbeds in Istanbul, where the devastation of the 1999 Kocaeli
earthquake was quite significant and a new earthquake with a magnitude greater
than 7 is considered to be highly probable to take place before 2034. This
research, conducted 16 years after the earthquake, rests upon the statistical
analysis of the prices of the residential units located in the visible risky
riverbeds commonly found all over Istanbul and of those with the same
attributes in the neighboring areas. The geological maps designate nearly
250-meter-long areas lying both to the left-hand and right-hand sides of the
thalwegs of the four riverbeds in the center of Istanbul as high-risk zones,
and those areas between nearly 250 and 500 meters to the left and right of the
thalwegs as low-risk zones. The central question of the article is whether
earthquake risk has any impact on housing prices in the riverbed areas in
Istanbul, and if it does, what the price differentials are. The prices of
residential units on a number of buildings whose locations are checked on the
geological map are examined using compare means analysis and regression analysis.
Both types of statistical analysis yield the same results: the earthquake risk
has a negative impact on two areas, while one area shows no price changes due
to this risk, and the dwellings on one high-risk zone have higher prices. It
has been found out that the change in housing prices occurs depending on the
housing submarkets in the riverbeds. Moreover, in those areas where the price
differentials are found to exist, the impact rate varies. The essay compares
the findings of the two types of statistical analysis as well as demonstrating
which variables are effective on the homogeneous submarkets formed through
cluster analysis. The results of this study can be employed in similar research
aiming to calculate the impact of earthquake risk or the change in the risk
perception on housing prices

Keywords

house price, riverbeds, earthquake, istanbul

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