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Journals / Central Bank Review / 2019 / Cilt: 19 - Sayı: 2

The impact of income distribution on house prices

M. Utku ÖZMEN
M. Koray KALAFATCILAR
Erdal YILMAZ
Pages
45–58
DOI
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Thus, policies directed to improving income equality might help mitigate the imbalances in the housing market.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Housing market developments have been attracting a great deal of attention in Turkey.
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Key Findings & Data:In this respect, basic regression estimations indicate that over the post-2010 period, income elasticity of house price changes is negative, despite housing being a normal good.
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Conclusion & Impact:Thus, policies directed to improving income equality might help mitigate the imbalances in the housing market.
🔬Design:Research Article
📍Scope:2010 Verileri
⚙️Variables:Domain Parameters

Özet

Housing market developments have been attracting a great deal of attention in Turkey. Concerns related to supply, particularly at the higher segment of the market, lead these discussions. In this respect, basic regression estimations indicate that over the post-2010 period, income elasticity of house price changes is negative, despite housing being a normal good. In order to reveal the underlying reason, we discuss the role of income distribution. Our empirical analyses suggest that the share of bottom (the top) income quintiles are positively (is negatively) correlated with house price changes. Given the current ample stock of houses, at the high-end of the market, a demand surge led by an increase in the income share of the top income quintile may not put pressure on house prices. In addition, the declining income share of bottom three income quintiles may lead to a reduction in their housing demand. Thus, policies directed to improving income equality might help mitigate the imbalances in the housing market.

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Cite This Article

ÖZMEN, M. U., KALAFATCILAR, M. K., YILMAZ, E. (2019). The impact of income distribution on house prices. Central Bank Review, Cilt: 19 - Sayı: 2, 45–58. https://ajindex.com/articles/142177

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