Abstract
PurposeThe purpose of this study is to examine whether there is a causal relationship between mortgage credit and house prices in Turkey.Design/methodology/approachGranger causality test, Toda–Yamamoto causality test, Fourier Granger causality test and Fourier Toda–Yamamoto causality tests are applied.FindingsThe findings show that there is a strong one-way causality between mortgage credit and house prices and that the developments in credit markets are more decisive in the relationship between mortgage credit and house prices than the developments in the housing markets.Practical implicationsConsidering a causal relationship between mortgage credit and house prices may contribute to more efficient use of the tools of both macroeconomic and microeconomic policies for the mortgage credit and housing markets in Turkey. Furthermore, by understanding the importance of the direction of causality between both dynamics, it may be possible to prevent and/or mitigate the negative effects of large house price movements on both Turkish housing and mortgage markets as well as on Turkish economy.Originality/valueTo the best of the authors’ knowledge, the contribution of this study is to examine for the first time whether the causal relationship between mortgage credit and house prices in Turkey is mutual as well as to apply four different causality tests and to compare their results for the first time.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Housing Markets and Analysis
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
