Issue 21: Turkey Residential Property Price Indices - 15 September 2010

posted @ 12:00am, Thursday 16 September 2010.

August 2010 Real Estate Sector Analysis:

Residential

INTRODUCTION

 The REIDIN.com Turkey Residential Property Price Indices (TRPPI) is designed to be a reliable and consistent benchmark of housing prices in Turkey. The purpose is to measure the average differences in house prices in a particular geographic market.

The monthly REIDIN.com TRPPI uses a stratified median index approach for index calculation with data covering the 7 major cities and their 71 districts, including Istanbul, Ankara, Izmir, Adana, Antalya, Bursa and Kocaeli. The national TRPPI (Turkey Composite Index) is a weighted average of those city indices.

Index series are set at 100 starting at the beginning of June 2007 and are calculated by using a moving average algorithm.

 INDEX SUMMARY

•  The residential sales prices increased 0.36% in Ankara, 0.98% in Antalya, 0.08% in Istanbul, 0.09% in Izmir and 0.12% in Kocaeli; on the other hand, prices were down 0.50% in Adana and remain constant in Bursa during August 2010.
• The residential rent prices increased 1.52% in Adana, 0.96% in Ankara and 0.23% in Kocaeli; on the other hand, prices were down 0.44% in Bursa, 0.15% in Istanbul and 0.82% in Izmir and remain constant in Antalya during August 2010.
• When adjusted by inflation rate according to the Consumer Price Index, the residential real estate investments caused a profit to the investors in real terms in August 2010. Accordingly, the rate of profit in real terms is 0.16% in Adana, 0.10% in Ankara, 0.06% in Antalya, 0.09% in Bursa, 0.13% in Istanbul, 0.06% in Izmir and 0.10% in Kocaeli on monthly basis.
  

DETAILED ANALYSIS

The monthly REIDIN.com TRPPI uses a stratified median index approach for index calculation with data covering the 7 major cities and their 71 districts, including Istanbul, Ankara, Izmir, Adana, Antalya, Bursa and Kocaeli. The national TRPPI (Turkey Composite Index) is a weighted average of those city indices. Index series are set at 100 starting at the beginning of June 2007 and are calculated by using a moving average algorithm.

Table 1.1 REIDIN.com House Sales Price Indices (Nominal, June 2007 = 100)

Chart 1.1 Turkey Composite House Sales Price Index (Nominal, June 2007 = 100)

Chart 1.2 Turkey Composite Rent Index (Nominal, June 2007 = 100)

Table 1.2 REIDIN.com Rent Indices (Nominal, June 2007 = 100)

 The residential sales prices increased 0.36% in Ankara, 0.98% in Antalya, 0.08% in Istanbul, 0.09% in Izmir and 0.12% in Kocaeli; on the other hand, prices were down 0.50% in Adana and remain constant in Bursa during August 2010.

 Chart 1.3 % Change in Residential Sales Prices  

The residential rent prices increased 1.52% in Adana, 0.96% in Ankara and 0.23% in Kocaeli; on the other hand, prices were down 0.44% in Bursa, 0.15% in Istanbul and 0.82% in Izmir and remain constant in Antalya during August 2010.

Chart 1.4 % Change in Residential Rent Prices

 When the residential real estate investments and the financial investment instruments are adjusted by inflation rate according to the Consumer Price Index (CPI), it is seen that the investment instrument having the highest monthly real return is the Istanbul Stock Exchange (ISE-100 Index).

When adjusted by inflation rate according to the Consumer Price Index, the residential real estate investments caused a profit to the investors in real terms in August 2010. Accordingly, the rate of profit in real terms is 0.16% in Adana, 0.10% in Ankara, 0.06% in Antalya, 0.09% in Bursa, 0.13% in Istanbul, 0.06% in Izmir and 0.10% in Kocaeli on monthly basis.

 When adjusted by inflation rate according to the Consumer Price Index (+0.40%), the monthly real profit rate of Istanbul Stock Exchange (ISE-100 Index) and Deposit Rate were 1.50% and 0.24%; while US Dollar, Euro and Gold (ingot) posted loss of 2.40%, 1.27% and 1.07% respectively.

Chart 1.5 Residential and Financial Real Returns (%)

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 INDEXFocus – A REIDIN.com Product

INDEXFocus is an online information service for real estate professionals to monitor and analyze residential house price data, with analytical tools to perform multiple market comparisons.

Available for Turkey (7 cities and composite index) and UAE (Dubai for the moment, Abu Dhabi is coming soon) INDEXFocus is an essential resource for professionals tracking real estate markets.