Analyzing speculative bubble formation in housing markets and detecting the existence of bubbles in selected provinces

With the transition of humankind to a settled lifestyle, housing constructions have increased. Urbanization has facilitated the emergence of new job sectors, enhancing public welfare and enabling individuals to accumulate savings and transform these into investments due to the income increases generated by employment. Over time, the substantial profits obtained from the housing market have further attracted people's interest, turning the housing markets into a center of attraction. Today, in the housing market, which is one of the locomotive sectors of the economy, the increasing demand, competitive market, and speculative price movements can lead to deviations in house prices, causing housing price bubbles to form. These bubbles, not exclusive to housing markets, can cause fluctuations in asset prices and lead to significant economic damage when the price bubble of an excessively priced asset bursts after a certain period. In today's still-vibrant market, housing prices have been evaluated to determine if they align with their real value under changing economic conditions. For this purpose, real house price index data for Ankara, Istanbul, and Izmir have been examined and subjected to the SADF and GSADF tests, which are frequently preferred for bubble detection. The study found the formation of bubbles in all three provinces during the period from January 2019 to January 2024.