Constructing a Hedonic Rental Price Index for Türkiye
Conference
64th ISI World Statistics Congress - Ottawa, Canada
Format: CPS Abstract
Keywords: hedonic price model, price to rent ratio, rent, rental price index
Abstract
Central Bank of the Republic of Türkiye (CBRT) has been publishing residential property price index since 2012 based on valuation data provided by real estate appraisal companies at the stage of approval of individual housing loans extended by banks. The dataset has information on properties of the dwellings including location, gross area of use, year of construction, building quality, heating type, number of bedrooms, etc. To be able to monitor the rental market, CBRT included rent variable in the aforementioned dataset in 2018. The purpose of this study is to examine the rental price developments in Türkiye and the three biggest cities; Istanbul, Ankara and Izmir. Using valuation data and hedonic price model, results reveal that rental prices have risen sharply during and post pandemic period. Still, house prices have increased more than rental prices in the same period. As a result, price to rent ratio has increased steeply above its long term average in the last two years.