-5

Homes lose about 50% of their value every decade in this country. Why is that?

Source:

  1. 2014 - present https://www.zingat.com/ankara-bolge-raporu
  2. 2005 - 2015 https://www.zingat.com/blog/istanbulda-10-yilda-ev-fiyatlari-ne-kadar-artti/
  3. Factor in the devaluation of TRY by comparing it to any stable currency https://www.investing.com/currencies/usd-try-historical-data for relevant data points listed above
  4. Another source 2010 - present https://tradingeconomics.com/turkey/housing-index
10
  • 1
    It would probably help to explain what information you're pulling from the various sites. Two of them appear to be Turkish so most people here aren't going to be able to read it/trust Google's translation enough to understand the calculations you're making and to formulate a response. May 31, 2022 at 17:31
  • I did explain in #3
    – user117384
    May 31, 2022 at 17:33
  • It's also worth noting that there are countries like Japan where it is well-known that homes depreciate and become basically worthless after 30 years. rethinktokyo.com/2018/06/06/… May 31, 2022 at 17:34
  • I'm referring to the average house price in meter square (this includes the value of the attached land), adjusted for the local currency devaluation (check #3 again if this part isn't clear).
    – user117384
    May 31, 2022 at 17:38
  • 1
    Do home sales in Turkey also include land? In many countries land is not included in the home ownership, only the building. In which case - why would it appreciate?
    – littleadv
    May 31, 2022 at 17:43

1 Answer 1

2

Many reasons could cause homes to lose value instead of appreciate. I won't opine about Turkish real estate per se, since I know next to nothing about their economic, cultural, and institutional structures. Nevertheless, here are just a few reasons in general real estate could depreciate in a given area:

  • The population is shrinking, thereby reducing demand
  • Cultural reasons, i.e. people think it is "gross" to live in someone else's old home.
  • Local/Traditional Building materials for the area are not durable and depreciate quicker.
  • There is no change in land title, thus real estate is less valuable and more susceptible to depreciation.
  • The local economy habitually overbuilds increasing supply beyond sustainable demand.
  • Government subsidies to move people into newer, safer, construction.
  • Bad economic conditions such as low liquidity in the economy.

This list isn't exhaustive, but it should give you an idea on what could be causing the phenomenon.

4
  • Thank you. How can I find historical data for these? Any pointers, metrics, etc? 1. "Bad economic conditions such as low liquidity in the economy" 2. "The local economy habitually overbuilds increasing supply beyond sustainable demand" 3. "There is no change in land title, thus real estate is less valuable and more susceptible to depreciation." I would like to understand how this works so I can "predict" the future better
    – user117384
    May 31, 2022 at 19:15
  • 3
    @user117384 this site is for answerable questions, not discussions and threads. You'll need to educate yourself on how real estate works in Turkey, it's not something that can be done in one answer to one question.
    – littleadv
    May 31, 2022 at 20:00
  • So, no way to measure liquidity in an economy?
    – user117384
    May 31, 2022 at 20:13
  • Look for economic data, housing starts, measures of money in circulation like M2, etc. Start building models from there.
    – Ryan
    May 31, 2022 at 23:11

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .