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High inflation and returns on residential real estate: evidence from Turkey

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  • Zeynep Onder

Abstract

This study examines the hedging behaviour of real estate investment in a high inflationary environment. The hypothesis that the real estate investment hedges both expected and unexpected inflation is tested. The returns of investment on residential apartments in several neighbourhoods in the capital of Turkey are used in the analysis. Expected inflation is measured by three proxies. It is found that in a high inflationary environment, real estate investment does not provide hedge against inflation. A reverse causality between returns on real estate and changes in expected inflation is not observed. However, a relationship between real returns and changes in inflationary expectations seem to be different in relatively low and relatively high income neighbourhoods.

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  • Zeynep Onder, 2000. "High inflation and returns on residential real estate: evidence from Turkey," Applied Economics, Taylor & Francis Journals, vol. 32(7), pages 917-931.
    • Handle: RePEc:taf:applec:v:32:y:2000:i:7:p:917-931
    DOI: 10.1080/000368400322255
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    References listed on IDEAS

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    Cited by:

    1. Feyzan Erkip, 2003. "The Shopping Mall as an Emergent Public Space in Turkey," Environment and Planning A, , vol. 35(6), pages 1073-1093, June.
    2. Coskun, Yener, 2010. "An Analysis of the Strenghts and Weaknesses of the Turkish Real Estate Market," MPRA Paper 28361, University Library of Munich, Germany.
    3. Tracey West & Andrew C. Worthington, 2003. "Macroeconomic risk factors in Australian commercial real estate, listed property trust and property sector stock returns: A comparative analysis using GARCH-M," School of Economics and Finance Discussion Papers and Working Papers Series 160, School of Economics and Finance, Queensland University of Technology.
    4. Jinliang Li & Liang Lei, 2011. "Determinants and information of REIT pricing," Applied Economics Letters, Taylor & Francis Journals, vol. 18(15), pages 1501-1505.
    5. Evren Ozus, 2009. "Determinants of Office Rents in the Istanbul Metropolitan Area," European Planning Studies, Taylor & Francis Journals, vol. 17(4), pages 621-633, April.
    6. Henry Koon Nam Lee, 2021. "The Inflation Hedging Effectiveness of Residential Property-Evidence from Three Emerging Asian Markets," International Real Estate Review, Global Social Science Institute, vol. 24(2), pages 221-251.

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