Assessing the existence of housing bubbles in Istanbul, Ankara and Izmir: A GSADF method analysis of new and old housing prices

Abstract

Need for shelter is the main requirement for people. The majority of shelter needs is fulfilled through the acquisition of estates. Housing prices may have been overpriced for a variety of causes at various times. A bubble asset is created when house prices deviate from basic values. The existence of property market bubbles has recently received a lot of attention. House prices in three provinces (Istanbul, Ankara, and Izmir) were investigated in this study between April 2010 and October 2022 to assess whether there is a housing bubble. In order to see the difference more easily, both new (YKFE) and old (YOKFE) housing prices were examined. In the study, the generalized sup augmented Dickey-Fuller (GSADF) method was preferred because it performed better in the presence of more than one balloon. According to the findings, price bubbles were detected in the real estate markets of Ankara, Istanbul and Izmir. As a different finding, no positive price bubble was detected in Ankara and Istanbul in 2019. Unlike other provinces, downward pricing is observed especially in old housing prices in İzmir in 2012. However, a price bubble is seen in İzmir in 2019. In addition, it can be seen that the negative pricing effect of the Covid-19 period was not seen in İzmir.