TESTING FOR BUBBLES IN THE HOUSING MARKET: FURTHER EVIDENCE FROM TURKEY

In this study whether bubbles exist in the three biggest cities housing market, İstanbul (TR10), İzmir (TR31) and Ankara (TR51) which are important parts of Turkish housing market is investigated. Besides, SADF and GSADF unit root tests developed by Phillips et. al. (2011, 2012) is used in order to detect bubbles in the housing market in the period between January-2010 and June-2014. The results show that real estate bubbles do not exist in the Turkish housing market and price increases above the average are experienced only for the short terms, not over the long terms permanently. In this context, efficient market hypothesis is valid for Turkish housing market and it verifies that Turkish housing market experienced the 2008 Mortgage crisis rather slightly than many other countries. These findings indicate stability in the housing market by sustaining its correct house pricing policy after the crisis.