Comparative analysis of Turkey-US real estate market in terms of financialization and 2008 crisis dynamics

The aim of this study is to give general overview of transformation of the real estate market in Turkey after 2002 by comparing US real estate market before 2008, in terms of financialization and crisis dynamics. To achieve this goal, historical and empirical data are used. One of the most important results of this study is that global funds seeking profitable investment in the housing sector, an increase in household borrowing, a low interest rate policy, asymmetrical information and speculation have an impact on the crisis on the the real estate market in USA as well as on the real estate market in Turkey. It is also concluded that these variables have distorted the supply-demand balance and the price-performance ratio in the Turkish real estate market, like the US real estate market before 2008. In addition to these observation in the real estate market, another result indicated by macroeconomic data is that, the financialization and construction-oriented growth process has dragged the economy into a more fragile structure with the increasing foreign debt stock of the private sector in Turkey. However, in this study, it was observed that there are some factors that limit the impact of a possible crisis in the real estate market in Turkey. These factors can be listed as obligatory urban transformation projects, easy transfer of treasury lands on the basis of rent and sharing, low securitization volume of housing compared to the USA. These can be seen as characteristic features of the real estate market in Turkey.