DO HOUSE PRICES IN TURKEY FOLLOW EURO AREA TRENDS?: REGIME SWITCHING APPROACH

Yıl 2019, Cilt: 14 Sayı: 52, 294 - 314, 24.07.2019

Mustafa Ozan Yıldırım , Raif Cergibozan , Caner Demir

https://doi.org/10.14783/maruoneri.594957

Öz

The purpose of this study is to make a comparative
analysis on the house price trends of
Turkey and Euro Area over the 2003-2016 period. Since the economic interactions
between these regions have a substantial volume, any shocks or booms in a
region might affect the other one. Within this scope, the study attempts to
investigate the house price trends in these economies by applying separated
Regime Switching Models. The findings firstly show that the low regime in
Turkey corresponds to the 2008-2012
period while in the Euro Area it corresponds to the 2006-2013 period. Secondly, the impacts of the potential factors
vary across regions. For Turkey, the interest
rate has a negative significant impact on house prices during both regimes, while
unemployment rate has a negative significant
impact only in the high regime. For the
Euro Area, both interest rate and unemployment rate have a statistically significant, negative impact on
house prices. As for income level, it is observed that for both regimes in
Turkey and the Euro Area, income level
has a positive impact on house prices.
The breakpoints suggest that the prior impacts of the global recession around 2008 firstly appear in Euro Area but firstly ends
in Turkey.

Anahtar Kelimeler

Housing market, Regime Switching Model, Turkey, Euro Area

Kaynakça

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