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

Author

Listed:
  • Isil Erol

    () (Department of Land Economy, University of Cambridge, Downing College, Regent Street, CB2 1DQ, Cambridge, England)

  • Kanak Patel

    () (Department of Land Economy, University of Cambridge, 19 Silver Street, CB3 9EP, Cambridge, England)

Abstract

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.

Suggested Citation

  • Isil Erol & Kanak Patel, 2004. "Housing Policy and Mortgage Finance in Turkey During the Late 1990s Inflationary Period," International Real Estate Review, Asian Real Estate Society, vol. 7(1), pages 98-120.
  • Handle: RePEc:ire:issued:v:07:n:01:2004:p:98-120
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    File URL: http://www.umac.mo/fba/irer/papers/past/Vol7_pdf/98-120.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ozlem Celik & Aylin Topal & Galip Yalman, 2016. "Finance and System of Provision of Housing. The Case of Istanbul, Turkey," Working papers wpaper152, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item

    Keywords

    housing policy in inflationary economies; civil servant’s wage-indexed payment mortgages (WIPMs);

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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