The Macroeconomic Determinants of The Housing Prices in Turkey

Abstract

In this study, we examine the relationship between housing prices and its macroeconomic determinants in the Turkish economy over the period 2010-2020. The ARDL bounds testing to cointegration and Granger Causality test procedures are employed in the empirical part of the study. The empirical results show that there is a significant negative relationship between housing interest rates and housing prices. Besides, it was observed that the appreciation of the US dollar against the Turkish Lira and the increase in the employment level had an increasing effect on housing prices. As a result of our research, we conclude that country-specific facts affect the macroeconomic determinants’ ability to explain the changes in housing prices.