Housing in Turkey: Prospects for different income groups

Abstract

It is imperative to develop a macro-level framework, and long-term policy alternatives to solve the housing problems of Turkey. Since most of the past housing programmes in Turkey were dependent on the estimation of housing needs, effective demand could not be properly evaluated. Yet, housing demand is closely connected with income level and ability to pay. So, effective housing programmes necessitate the predetermination of target groups, where income level and income share devoted to housing expenditures are considered. With this in mind, this study aims to compare alternative scenarios of housing finance considering their accessibility to different income groups. For this purpose, a macro-economic simulation model of housing needs assessment was utilised. Investment and subsidy requirements of the proposed housing programmes were also evaluated by using macro-economic data such as GDP growth rate, inflation and housing investment. As a result, it was concluded that current housing programmes are very far from meeting the demand of households. Comparison of four scenarios showed that new policy proposals should cover rental housing, especially for low income groups.