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The effects of monetary policy on housing prices

Author

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  • Berna AK BÝNGÜL

    (The School of Applied Sciences, Department of Banking and Finance, Kýrklareli University, Turkey)

Abstract

Many factors have an impact on housing prices. Among these factors, short term interest rates have significant importance. It is because changes in short term interests are important indicators of the efficiency of the monetary policy and the functioning of the housing prices channel is an important tool for the monetary authority to have an impact on economic activities. The purpose of this paper is to study the efficiency of the housing prices channel in Turkey. In our study, we used VAR method based on data from 2007–2019. As a result of the analysis, we found out that interest rates and the housing credit index directly affect housing prices in Turkey.

Suggested Citation

  • Berna AK BÝNGÜL, 2019. "The effects of monetary policy on housing prices," Turkish Economic Review, EconSciences Journals, vol. 6(3), pages 241-249, September.
    • Handle: RePEc:cvv:journ2:v:6:y:2019:i:3:p:241-249
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    References listed on IDEAS

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    3. Zan Yang & Shuping Wu & Yanhao Shen, 2017. "Monetary Policy, House Prices, and Consumption in China: A National and Regional Study," International Real Estate Review, Global Social Science Institute, vol. 20(1), pages 23-49.
    4. Seyfettin ERDOÄžAN & Derya MERCAN & Ayfer GEDÄ°KLÄ°, 2018. "An analysis on the housing price channel: The case of BRICT," Journal of Economics Library, EconSciences Journals, vol. 5(4), pages 358-370, December.
    5. Bjørnland, Hilde C. & Jacobsen, Dag Henning, 2010. "The role of house prices in the monetary policy transmission mechanism in small open economies," Journal of Financial Stability, Elsevier, vol. 6(4), pages 218-229, December.
    6. Gupta, Rangan & Jurgilas, Marius & Kabundi, Alain, 2010. "The effect of monetary policy on real house price growth in South Africa: A factor-augmented vector autoregression (FAVAR) approach," Economic Modelling, Elsevier, vol. 27(1), pages 315-323, January.
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    Keywords

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    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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