Here Is The Reason Behind The Increase In Property Prices

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According to the report by the Central Bank qualified house number affected the prices as well.

Housing prices decreased with the arrival of New Year in Turkey. Housing price index in Turkey increased %0.52. The rise is the lowest one in the last one year. The annual rise was %18.41 in December but it increased to %17.50 in January.

New housing prices decreased %0.68 in January. This was the second lowest price decline. The prices descended to %15.21 with the decline in January.

The Central Bank made a new addition to Housing Price Index that has been calculated and published since the start of 2010. That addition was the pure rise of housing prices. The ultimate and total housing prices increase were already published. The price between pure house price and the ultimate one is caused by the quality of the house.

Consequently, The Central Bank published this data for the first time. We compared the price rises of housing in the last five years with hedonic price rises in statistical regions. As the Central Bank expressed, the 4/1 of the nominal rise of house prices and half of the real rise are caused by quality increase. This rise brings the debates whether there is balloon or not in house market. At least 4/1 of discount can be made while doing balloon account.

In this situation, the description of housing prices and the balloon should be made. According to Nobel Prize winner prof. Robert Schiller, If the rise is more than %100, then there may be balloon.

The consumer price index is %50.3 and housing price increase of Turkey is %98.0 in the last five years. Accordingly, the reel increase is far away from the balloon are with 31.7


Gaziantep with %114.7 in housing price rise places second after Istanbul. The reel increase is 42.8. According to hedonic prices five years rise is 93.8 and the reel rise is 28.9.

The Central Bank made an adjustment to housing price rises with hedonic Index.  According to this, the reel increase in rise of housing prices in Turkey is %13.4 in the last five years. The ultimate prices without quality rise are 31.7. That is, about half of the total increase was caused by quality rise.


The housing prices has increased %141.6 in Istanbul in the last 5 years. The rise is about %60.7 when the inflation is removed. In this way, it is more than the half way of balloon. However, the hedonic rise increased %118.9 and the reel rise is %45.6. If we look in hedonic aspect, even the half of the way is not passed. There is such a difference between them.

The difference between total and hedonic rise increase stands out most in the undeveloped cities of Anatolia. For example in Van, the housing prices have been %40.5 in the last five years, and this was increased to %68.2 with quality rise. As a result, the ratio of quality rise is %68.4 to hedonic rise. The reason behind the highest quality rise may be the earthquake in Van.


The second city where the quality rise was the highest is Muğla. The reasons that it is a holiday place and its rise in housing quality maybe the reasons that stands behind this.

The ultimate rise shows us that there is no balloon problem yet. The real problem is failure in selling houses that is the low of demand. Apparently, the purchase options are sufficient but financing facilities are restricted.

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