REAL ESTATE BALLOON explode MI

Milliyet newspaper dated 08.12.2010 on the website of the news contained in the title: "Real Estate market, there is no question of any balloon." According to the news, the International Finance Summit in the context of the "New Normally Reform Strategies and Expectations: Public Perspective" session of the Central Bank Governor Durmus Yilmaz in his speech, that the housing sector on the question of whether there is a bubble, "Asset prices, I do not see a bulge. As of today, any real estate market a balloon that is not saying "at least" as of today, "real estate prices would create a problem if the appreciation expressed an extreme.

On 12.12.2010, that is, four days after the president's speech, Vice President of the Central Bank Başçı Erdem, Turkey Economic Institution, in his speech, the last period, the Central Bank, the additional measures, the next time they think the whole world would take under the influence of a preparation for the new countercyclical should be treated as having said, "The main feature of this new conjuncture, reliable and dynamic emerging market economies as a result of intensive capital flows, the economy overheating, excessive borrowing and the risk of the formation of asset bubbles appear and the current account deficit to levels that will threaten the financial stability of the possibility of reaching," he said.

WHAT HAPPENED TO DA asked

All of a sudden happened, the unthinkable for many years started asking these questions? What happened in two of the top manager of the Central Bank, although not to this day as a potential risk of short-term, asset balloons, real estate prices began to mention the excessive appreciation?

In particular, foreign trade balance, current account deficit and the appreciation of the problems created by excessive real estate prices, regardless of the content of "growing" craze, the representatives of the financial capital of the doors and the "economy channel" in the name of the media outside the lobby of the financial capital of broadcasting circles, being expressed for a long time.

Managers of the Central Bank of the issue and the "media economy" is due to come on the agenda, the sustainability of this system is now thoroughly going gets tough, the possibility to turn into an explosion in the past compared to the increase in swelling.

Even the most radical free-piyasacılar, uncontrolled foreign currency inflows, aware of the devastation caused on national economies. Some of the developing countries by reducing interest rates, some short-term fund inflows tax (tobin) by applying some of the corresponding increase in reserve requirements, with hot money loans pahalandırarak azdırılan imports of consumption and asset prices based on the swell of trying to take precaution against.

America, Iceland, Greece, Hungary, Spain, Portugal, Ireland is now saying that this was seen as a definite, external financial abundance, causing asset balloons. Inflatable balloons explode one day.

At this point needs to be done, "asset bubbles occurred in Turkey do? Is there really such a risk? "Search for the answer to questions. The most simple way, the real increase in real estate prices, the general increase in prices compared with the inflation figures.

In our country, house prices in relation to public institutions has collected data regularly. A few years ago, some foreign banks with the cooperation of related organizations and initiated the "housing price index" in studies, research methodology, data sources, data collection due to lack of clarity about any format and evaluation criteria, there is nature that will allow an assessment by us healthy.

Net rental CHANGE

In contrast, by TurkStat, CPI data are monitored on a regular basis for many years under the lease bedellerindeki change. As you know, rent bedellerindeki, with the change in the residential real estate sales prices getirisindeki has a direct relationship between changes.

Published by TurkStat, 2003 = 100 based Consumer Price Index, according to 92.17 in JANUARY of 2003, the "True Lease" index value, the level of 266.55 reached in November 2010, increased by 289 percent in the last nearly eight years. The increase in housing prices that occurred at approximately this level we can remove the result. During the same period the overall increase in the CPI, the level of 192.47 percent.

According to Central Bank data, the effective dollar purchase price of £ 1.6385 on 02.02.2003, on 15.12.2010 has fallen 1.4927 TL. In this case, the increase in housing prices, in U.S. dollar terms reveals a much higher level occurs.

These data, the period from 2003 to this day, although the fear of the earthquake and are supported by the thaw in agriculture, housing prices, and inflation explained by an increase in demand is seen that an increase in level.

The most important reason for this increase in the banking data suggest that there is an increase in consumer loans for housing. According to the BRSA, 124 million 691 thousand TL in January 2003 from a level of housing loans, in October of 2010 the level of 57 billion out of £ 682 million, eight-year period increased by approximately 462,600 per cent.

Banks, money being plentiful and cheap, easily provided by the leveraged resources provided from abroad, as housing loans distributed to citizens, supported by extensive advertising campaigns in a "rush period of residence" to live is provided. For many years, high inflation and a very cheap even if the citizens of a country accustomed to high interest rates, compared to world averages, such as very high interest rates and paying rent with the promise of housing created this artificial demand, caused the recovery in home sales, housing prices lead to increased inflation on the value rather was.

BALLOON explode MI

Official statistics show that since 2003 is the end of the period of attack in the house. Turkstat News Bulletin dated November 25, 2010 The information contained in the first two quarters of 2010, as well as in the third quarter, continuing the decline in housing sales suggest. In the third quarter of 2010 decreased by 25.21 percent over the same period the previous year and realized, was 7.28 per cent decline compared to the previous period.

Housing sales level reached, during the height of the crisis, even fell below the 2008 figures. Housing sales, the lowest level, in the third quarter of 2008 as a gerçekleşmişken 92516, 85857 in the first quarter of 2010, 90,270 in the second quarter in the third quarter was 83,697.

In our opinion, both the media and members of the Central Bank is the main reason for pushing administrators to talk about it. All media covering the advertising, breaking records in the current account deficit, despite the abundance of money and the project, regardless of the nature of the place and the need for housing gold rush in the logic of the inevitable decline in housing sales engellenememesi, in the hands of unsold housing stock in a serious, substantial amounts of debt under the industry vulnerable brings.

Accustomed to a very high profit margin to sell the housing sector, interest and finds the solution to get rid of inventory costs, reduce profit rates, go to discount prices by increasing demand, not seen in the consumption of housing stock, the project phase under appropriate conditions and intensive advertising campaigns to more modest projects in the sector removed from sale tried to ensure the entrance of fresh resources.

Do you have a balloon or Do not? For the moment not very easy to say something definite. In the near future will see the answers to these questions.

Housing sales in the period ahead, the housing kiralarındaki / residential sales prices and exchange relevant sector loans (construction sector and mortgage loans) are useful to monitor developments carefully.

The Central Bank is understood to be aware of the risk. The importance of the sector for growth and employment figures ortadayken, from the selection environment, this awareness did not turn converted stable living will see the applications.