Housing Policy and Mortgage Finance in Turkey During the Late 1990s Inflationary Period

This paper evaluates the Turkish government’s housing policy for financing the public sector housing and examines the desirability of wage-indexed payment mortgage (WIPM) contract from the lenders perspective. The WIPM contract introduced in 1998 differs from the standard index-linked mortgages in that it is based on the Civil Servant’s Wage Index and there is no amortization rate. From the lender’s perspective, the WIPMs are found to be desirable mortgage instruments in periods of persistent high inflation because they eliminate the real interest rate risk and credit risk of the ARM and the ‘wealth risk’ of a nominal FRM.housing policy in inflationary economies, civil servant’s wage-indexed payment mortgages (WIPMs)

Local House Price Effects of Internal Migration in Queensland: Australia’s New Interstate Migration Capital

This paper examines the causal impact of internal migration on house price changes in Queensland – Australia’s new capital of interstate migration. We study annual housing price growth across 82 Statistical Areas Level 3 (SA3) regions between 2014 and 2019 by employing a spatial correlation approach. We also estimate the impact of the increasing share of migrants from New South Wales on the local housing markets in Queensland. The main findings are summarised as follows: (1) an annual increase in the inflow of migrants equal to 1% of a region's initial population leads to a 0.6%–0.7% annual increase in Queensland’s house prices across different empirical specifications; (2) internal migration inflow increases house prices in Greater Brisbane metropolitan area, whereas internal migration has a negative impact on housing price changes in the Rest of State regions; (3) migrants tend to move towards SA3 regions where house prices grow more slowly conditional on the local area controls and the time fixed effects; (4) the increasing share of migration from New South Wales does not have a significant effect on house price growth in Queensland. Our findings have important policy implications related to sustainable local economic development since sustainable development is, for the most part, achieved by attracting newcomers to the cities/towns and completed through the involvement of migrants in local housing and labour markets

Internal Migration and House Prices in Australia

Australia is one of the most mobile countries in the world through internal migration, which is an overlooked part of population change. This study provides the first empirical evidence for the impact of internal migration inflow on house price changes across 237 statistical regions in Australia from 2014 to 2019. Employing a spatial correlation approach and constructing a novel instrumental variable that matches the shift-share instrument used in the immigration literature, the paper indicates that population mobility increases housing prices in migrationreceiving regions. Internal migration that amounts to 1% of the initial local area population is associated with a 0.7% to 0.8% increase in house prices in the three most populated states of Australia. The results provide further suggestive evidence that migration inflow has a significant positive effect on house price changes in metropolitan areas of New South Wales and Victoria – i.e., Capital Cities of Sydney and Melbourne – rather than non-metropolitan regions

A comparative study of Turkey, Lebanon and Jordan: host country conditions and Syrian refugee women’s reproductive health

This work project explores the differences in the reproductive health of Syrian refugee women in Turkey, Lebanon and Jordan based on three independent factors, which are gender in/equality, pre-existing general women’s health and the official importance given to national health care services. These countries are chosen because Turkey, Lebanon and Jordan are the countries who host the most crowded Syrian refugee populations. This research investigates whether or not these factors have an impact on the Syrian refugee women’s reproductive health in these three host countries. The research includes a quantitative analysis with the help of SPSS statistical program and a general and country-based literature reviews. My data comes from the World Values Survey and the CIA World Factbook. It is important to raise these questions in this field because the refugee influx is one of the most important issues in the world in the last decade, and refugee women are one of the most vulnerable populations whose health status has been affected by.Bu proje, Türkiye, Lübnan ve Ürdün'deki Suriyeli mülteci kadınların üreme sağlığındaki farklılıkları, cinsiyet eşitliği, var olan genel kadın sağlığı ve ulusal sağlık hizmetlerine verilen resmi önem olmak üzere üç bağımsız faktöre dayanarak araştırmaktadır. Bu ülkelerin seçilmesinin sebebi Türkiye, Lübnan ve Ürdün’ün en kalabalık Suriyeli mülteci nüfusuna ev sahipliği yapan ülkeler olmasıdır. Bu araştırma, bu faktörlerin Suriyeli sığınmacı kadınların üreme sağlığı üzerinde bu üç ev sahibi ülkede bir etkisi olup olmadığını araştırmaktadır. Proje, genel ve ülkeye dayalı literatü incelemeleri ile SPSS istatistik programının yardımıyla nicel bir analizi içermektedir. Verilerim World Values Survey ve CIA World Factbook kaynaklarına dayanmaktadır. Bu alandaki çalışmalar düşünüldüğünde bu soruları sormak büyük önem arz etmektedir. Bunun sebebi son 10 yılı göz önünde bulundurduğumuzda mülteci meselesinin toplum ve devletler bazında en önemli sorunlardan biri olmasıdır. Bu mülteci sorunu içerisinde mülteci kadın popülasyonlarının sosyo-ekonomik durumlarının yani sıra, alınan sağlık hizmetleri içerisinde en savunmasız sayılabilecek konumda olması, bu çalışmanın temel sorusunu ortaya çıkarmıştır.Este trabalho de projeto explora as diferenças na saúde reprodutiva de mulheres sírias refugiadas na Turquia, Líbano e Jordânia, com base em três fatores independentes: igualdade de género; condições pré-existentes de saúde das mulheres, no país em causa; importância dada aos serviços nacionais de saúde. Estes três países foram escolhidos porque a Turquia, o Líbano e a Jordânia são os Estados que mais refugiados sírios têm recebido. Esta pesquisa procura investigar se esses fatores têm impacto na saúde reprodutiva das mulheres refugiadas sírias, nestes três países. A pesquisa inclui uma análise quantitativa realizada com recurso ao programa de estatística SPSS e uma revisão comparativa da literatura. Os dados quantificáveis têm origem no World Values Survey e na CIA World Factbook. Considerou-se importante fazer esta abordagem porque os fluxos de refugiados têm sido, na última década, um tema prioritário no mundo; e porque as mulheres refugiadas são uma das populações mais vulneráveis, cuja saúde tem sido profundamente afetada por essas circunstâncias

Employment Effects of Immigration to Germany in the Period of Migration Policy Liberalization, 2005—2018

Germany has undergone a significant migration policy shift since the early 2000s. This paper examines the total employment effect of immigration during the liberalization of migration policies from 2005 to 2018 using a spatial approach. A set of methods, along with static and dynamic macro-econometric models, were applied on a balanced panel formed by a unique and manually collected data for 156 statistical regions based on the definition of the German Federal Employment Agency. We find suggestive evidence that there has been a significant adverse impact of new immigrants on the overall employment rate, and this negative effect is substantially larger than those reported in previous studies on the employment effect of immigration in the German labour market. In a further step, we divide our sample into two subsamples to capture the employment effect of the massive humanitarian inflows that began in 2015. Our results indicate that, in addition to the new immigrants' lower rate of integration into the local labour markets, a sudden influx of asylum seekers may possibly lead to a substantial fall in the employment rates, because asylum seekers are not immediately allowed to work in the country

Role of Construction Sector in Economic Growth: New Evidence from Turkey

After the 2001 financial crisis, Turkey's economy moved full-speed ahead, except for a temporary reversal in 2009 during the global financial crisis. Throughout the years of accelerated growth in 2002-2007 and 2010-2011, construction output increased at a faster rate than the economy as a whole, but in the periods of stagnation in 2001 and 2008-2009, construction industry was the first to suffer. This paper investigates the causal relationship between construction investments and economic growth in Turkey from 1998Q1 to 2014Q4. Unlike the previous studies that use two variable – real GDP and construction industry growth – Granger causality tests, the present study additionally employs three-variable – real GDP growth, construction industry growth, and real interest rate – VAR models to investigate the causal relationships in a multivariate setting. The paper also employs Zivot-Andrews test for determining structural breaks in data and then extends the causality analysis by dividing the seventeen-year sample period into smaller sub-periods that are defined according to the location of breaks in data. The results for the entire sample of 1998-2014 indicate that economic growth in Turkey has preceded construction activities with two- to four-quarters lags, but not vice versa. Hence, unlike the widespread belief that the construction plays a crucial role in Turkey’s economic growth, construction industry is not a driver of GDP growth but a follower of fluctuations in the macro-economy. However, our sub-sample analysis reveals that the causal relationship between economic growth and construction investments varies noticeably across the sub-periods in the national economy. We find that expansion in construction sector caused GDP growth over the last five years. The low interest rate environment with the help of radical changes in urban legislation and city building boosted up the construction industry, which resulted in economic growth in sub-period 2010-2014. Hence, we conclude that the temporary effect of construction industry growth on the GDP growth in the sub-period 2010-2014 is not justified for the overall sample period. Provided that much of the cyclicality in construction investment stems from the sector’s sensitivity to interest rates, we also find that there exists a bidirectional relationship between construction activities and real interest rates both for the entire sample period and for the sub-period 2002-2014. Lastly, construction activities have short-lived effects on the economic growth and thus cannot offer permanent solutions for the economic troubles in Turkey

Internal migration and house prices in Australia

Australia is one of the most mobile countries in the world due to internal migration. This study provides the first evidence of the causal impact of internal migration inflow on house price changes across 237 statistical regions in Australia from 2014 to 2019. Employing a spatial correlation approach, the paper indicates that internal migration that amounts to 1% of the initial local area population is associated with a 0.52–0.71% increase in house prices in the three most populated states of Australia. Migration inflow has a significant positive effect on house price changes in metropolitan areas of Sydney and Melbourne rather than non-metropolitan regions

Role of Construction Sector in Economic Growth: New Evidence from Turkey

After the 2001 financial crisis, Turkey's economy moved full-speed ahead, except for a temporary reversal in 2009 during the global financial crisis. Throughout the years of accelerated growth in 2002-2007 and 2010-2011, construction output increased at a faster rate than the economy as a whole, but in the periods of stagnation in 2001 and 2008-2009, construction industry was the first to suffer. This paper investigates the causal relationship between construction investments and economic growth in Turkey from 1998Q1 to 2014Q4. Unlike the previous studies that use two variable – real GDP and construction industry growth – Granger causality tests, the present study additionally employs three-variable – real GDP growth, construction industry growth, and real interest rate – VAR models to investigate the causal relationships in a multivariate setting. The paper also employs Zivot-Andrews test for determining structural breaks in data and then extends the causality analysis by dividing the seventeen-year sample period into smaller sub-periods that are defined according to the location of breaks in data. The results for the entire sample of 1998-2014 indicate that economic growth in Turkey has preceded construction activities with two- to four-quarters lags, but not vice versa. Hence, unlike the widespread belief that the construction plays a crucial role in Turkey’s economic growth, construction industry is not a driver of GDP growth but a follower of fluctuations in the macro-economy. However, our sub-sample analysis reveals that the causal relationship between economic growth and construction investments varies noticeably across the sub-periods in the national economy. We find that expansion in construction sector caused GDP growth over the last five years. The low interest rate environment with the help of radical changes in urban legislation and city building boosted up the construction industry, which resulted in economic growth in sub-period 2010-2014. Hence, we conclude that the temporary effect of construction industry growth on the GDP growth in the sub-period 2010-2014 is not justified for the overall sample period. Provided that much of the cyclicality in construction investment stems from the sector’s sensitivity to interest rates, we also find that there exists a bidirectional relationship between construction activities and real interest rates both for the entire sample period and for the sub-period 2002-2014. Lastly, construction activities have short-lived effects on the economic growth and thus cannot offer permanent solutions for the economic troubles in Turkey

Financial transformation and housing finance in Turkey

The Real Estate Sector in Turkey Since the adoption of import-substitution industrialization as development strategy from the 1960s onwards in Turkey, the construction industry has been considered as an engine of economic growth. With the reorientation of economic policies since the 1980 stabilization programme, the construction industry has been assigned a new role as part of the export-oriented growth strategy as Turkish contractors have expanded their activities abroad, especially in the Middle East and North Africa. Meanwhile, within the domestic economy, the construction industry assumed a new saliency with the foundation of the Housing and Public Partnership Directorate in 1984 and its subsequent separation into the Public Participation Administration and the Housing Development Administration (TOKI) in 1990. Like most other developing countries, Turkey has been experiencing premature deindustrialization processes that have been accelerated by the Adalet ve Kalkınma Partisi (AKP — Justice and Development Party) government after the 2001 economic crisis. 1 In other words, Turkey is rapidly becoming a service sector-based economy without having fully industrialized, which is a result of Turkey’s post-1980s neoliberal economic policies and subsequent financialization processes tied to wider financial globalization (Rodrik 2015). The urban policy consequences of premature de-industrialization have been the creation of a ‘new’ middle-income class — the urban rich , who take risks, demand and consume a lot — and the commodification of cities and urban spaces by the AKP government through a radical change in urban legislation and city building. Consequently, within the region, including the Eastern Europe, Middle East and Russia, Turkey has been one of the fastest-developing real estate markets since 2002. Large-scale housing projects with shopping malls and office developments emerged in big cities. Likewise, the Turkish housing market and its financing have experienced significant changes over the last decade. These changes have given rise to three main dynamics: the need for affordable housing for low-income households; the increased entry of global investors into the Turkish real estate market; and legislative reforms..

Pricing the default option of inflation-indexed mortgages using explicit finite difference method

Free to read on publisher website This paper evaluates the default risk of civil servants’ wage-indexed payment mortgage (WIPM) contract in Turkey, which is linked to the expected inflation. The aim of the study has two sides: one is to apply the contingent claims approach, which has been widely us ed to price standard fixed- and adjustable-rate contracts, to price an inflation-indexed mortgage. The second is to understand if WIPM contract is a suitable mortgage design for lenders under an inflationary economy. We extend the traditional risk-neutral valuation for pricing the WIPM contract with its embedded default option. Using backward pricing method, namely t he explicit finite difference method, we evaluate this unique inflation-index ed mortgage contract from the lender’s point of view. The expected inflation and house price are the two stochastic variables underlying the WIPM contract. Our numerical results show that the lender benefits from originating WIPM only during the periods when the real interest rate is very low. Expected inflation risk premium notably increases the value of future payments on WIPM contract, resulting in high values of lender’s position in the mortgage agreement. The results also show that house price volatility has a greater effect on the borrower’s default option value compared to the expected inflation volatility