Vol. 9 No. 4 (2021): Business & Management Studies: An International Journal
Articles

Mortgage volume and macroeconomic factors: Evidence from Turkey

Tuğba Güneş
PhD Candidate, Ankara University, Graduate School of Natural and Applied Sciences, Department of Real Estate Development and Management, Ankara, Turkey
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Ayşen Apaydın
Prof. Dr., Ankara University, Faculty of Applied Sciences, Department of Actuarial Sciences, Ankara, Turkey
Bio

Published 2021-12-25

How to Cite

Güneş, T., & Apaydın, A. (2021). Mortgage volume and macroeconomic factors: Evidence from Turkey. Business &Amp; Management Studies: An International Journal, 9(4), 1504–1520. https://doi.org/10.15295/bmij.v9i4.1939

Abstract

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

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