House Price and Rent Developments in Istanbul: 1988-2012

The analysis regarding the housing prices could be made in the light of long-term data. However, because the indexes that have been produced recently in Turkey are limited to a short term, such long-term analysis could not be made. Building backward housing price indexes by analyzing the factors that affect the development of housing prices will bring about the analysis of not only the dynamics of the domestic housing market within the country but also a comparison of housing markets between our country and other countries of the world.The main purpose of this study is to close the gap of the index needed to evaluate the movement of housing prices in the city of Istanbul. For this purpose, the data about the sale and rent prices of houses within a selection of districts of Istanbul between 1988 and 2012, a time span of 25 years was gathered to construct the sale and rent index of houses. Proceeding from this index, the development of sale and rent prices has been examined; the long-term trends and the short-term fluctuations of housing prices have been determined and the interaction between the change in housing prices and other economic variables has been researched.In this study, it has been found out that the sale and rent prices are compatible with the city model in the sense that it is closed in the short term and open in the long term; that the housing supply in Istanbul has been elastic; that transportation solutions which do not lead to space friction could be produced; that housing prices move parallel to stock exchange and bond prices; and that there has been no house price bubble.