A CRITICAL REVIEW ON THE EFFECT OF HOUSING INDUSTRY TO THE GLOBAL FINANCIAL CRISIS: THE CASE OF TURKEY

The overall aim of the research presented is to investigate the relationship between the macroeconomic factors linked with financial crises and housing industry in Turkey. The research includes empirical investigation in a regression based model using mostly the Turkish market data. The ability of public intervention, indicated by central bank reserves and corporate bankruptcies are statistically effective in the performance of housing market. There is weak statistical dependence of housing on financial crisis. The research is based on Turkish market data between the period 2002-2009. The research can be extended with global market data especially from the emerging market for a comparative study. Research in this field should focus more to industry dynamics rather than macroeceonomic variables explaining crisis to explore housing sector dynamics. The real estate managers should look to central bank reserves and corporate bankruptcies more closely as a macroeceonomic variable affecting housing industry. The effect of macroeceonomic variables in the period of financial volatility is limited in the housing market, whereas industry factors should be analized. Central bank reserves and corporate bankruptcies are important indicators of housing industry growth that can be used as an instrument. To to the author’s knowledge, the paper is the first study to investigate the link between financial crisis and housing market in Turkey

Keywords:

Housing Market, Financial Crisis Asset Bubble,

PDF

___

Aizenman, Joshua, and Yothin Jinjarak b, (2009) “Current account patterns and national real estate markets”, Journal of Urban Economics, p.81
Beltratti, Andrea, and Claudio Morana, “International house prices and macroeconomic fluctuations” (2009) , Journal of Banking & Finance,p.12
Bolboaca, Sorana-Daniela, Lorentz Jantschi, “Pearson versus Spearman, Kendall's Tau Correlation Analysis on Structure-Activity Relationships of Biologic Active Compounds” (2006), Leonardo
Journal of Sciences , p. 185 Burrill, Donald F., Modeling and Interpreting Interactions in Multiple Regression, http://www.minitab.com/uploadedFiles/Shared_Resources/Documents/Articles/interactions_in_mu ltiple_regression.pdf Bunda, Irina, and Michele Ca Zorzi, “Signals from housing and lending booms, Emerging Markets Review” (2009) , p.13
Cheung, Yin Wong, and Kon S. Lai, “Lag order and Critical Values of the Augmented Dicky Fuller Tests” (1995), Journal of Business and Economic Statistics, p. 277
Comitee on Capital Markets Regulation, “The Global Financial Crisis, A plan for Regulatory Reform” (2009) , p. v
Dean Baker, “The Housing Bubble and the Financial Crisis” (2008), Real-world economics review, p. 81
Dick K. Nanto, “The Global Financial Crisis: Analysis and Policy Implications”, Congressioal research service Ehler, Madeline, “Policy Responses to the Global Financial Crisis, RBA Economics Competition” (2009) , p.1
Foote, Christopher L. , Kristopher Gerardi , Lorenz Goette , and Paul S. Willen, “Just the facts: An initial analysis of subprime’s role in the housing crisis” (2008), Journal of Housing Economics, p.303
Sutijo, Brodjol, “Cointegration approach on estimation model of export and import agricultural product” (2009), IICMA, p.4
Truman, Edwin M., “How Quickly Can We Recover from the Global Financial Crisis?” (2009),
Inaugural Symposium of the US-Japan Research Institute, p.8