Ripple effect and regional house prices: evidence from Turkey

Abstract

This paper investigates the existence of ripple effect and regional converge of house prices for Turkey via employing the Autoregressive Distributed Lag (ARDL) co-integration method. In this paper, the house price index is used from 2010:1 to 2018:6 for the biggest three regions of Turkey, which are Istanbul, Ankara, and Izmir. The empirical findings confirm the existence of ripple effect between three regional housing markets and the long-run convergence of regional house prices. The findings also show that diversity in regional housing prices has changed according to the different regions in both short-term and long-term. However, the adjustment speed for the long-term equilibrium also differs between regions.