New Geographies of Residential Capitalism: Financialization of Turkish Housing Market since the Early 2000s

Authors: Isil Erol*, Ozyegin University
Topics: Economic Geography, East Europe, Urban Geography
Keywords: Financialization, housing market, mortgages, developing world, geography of financialization
Session Type: Paper
Day: 4/10/2018
Start / End Time: 4:40 PM / 6:20 PM
Room: St. Charles, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded

Neoliberal urban policies and financialization in housing markets are not limited to the western and developed countries but have rapidly spread out to the developing world. Since the latest global financial crisis developing economies, especially China, Brazil, and Turkey have gradually accumulated mortgage debt and experienced rising price-to-rent levels. The impact of a large global pool of excess liquidity on housing markets varies significantly across countries because of the different macroeconomic and institutional settings they have, and the existing literature still lacks a comprehensive understanding of the geography of developing countries experiencing the integration of property and financial markets. Lately, financialization of housing markets in China and Brazil has been studied to some extent; however, related academic research on Turkey did not exist so far. This paper evaluates financialization process in Turkish housing market by using the mortgage market and financial sector related indicators, and housing-based welfare strategy of the government. The paper uses size of mortgage market, the degree of financial sector liberalization and homeownership ratio as the main indicators to understand whether or not the recent changes in housing market regulations and policies verify the financialization of housing in the country. In the last decade Turkey has experienced demand-driven house price increases and government-supported commodification in cities, but the national housing market had a weak association with global factors. Hence, it is not possible to define a financialization process through capital market instruments, including the mortgages, mortgage-backed securities, and publicly listed real estate companies or fund

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