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TThe comparison of the ratio of the total numbers of mortgage loans used in Istanbul in the period between 2010 and 2013 and the period between 2010 and 2016 to the population.
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Context 1
... to this chart, there is a decrease in the total mortgage loan usage after 2013, and this trend continues in the following years. Therefore, when conducting a survey on the use of mortgage loans proportionate to the population, it is thought that it would be more meaningful to compare the years 2013 and 2016, and figure 8 is prepared in this direction. Accordingly, the ratio of the mortgage loans used to the population does not tend to decrease, but it increases. ...
Context 2
... to this chart, there is a decrease in the total mortgage loan usage after 2013, and this trend continues in the following years. Therefore, when conducting a survey on the use of mortgage loans proportionate to the population, it is thought that it would be more meaningful to compare the years 2013 and 2016, and figure 8 is prepared in this direction. Accordingly, the ratio of the mortgage loans used to the population does not tend to decrease, but it increases. ...
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... In sum, we argue that our data are useful and valuable for the purpose of our study, compared to the highly unstable market environment that followed our sample period due to the aforementioned events. Indeed, while regulatory changes of minimum loan-to-value levels increased from 75% in 2007 to 80% in 2016 (Aslan and Dincer, 2018), the rate of mortgages to total home sales in Türkiye has decreased from 40% in 2013 to 15% in 2023. 5 Specifically, the number of mortgages granted over a 12-month period decreased from 460,112 in 2013 to 193,502 in the period from December 2022 to November 2023. ...
We utilize machine learning methods to model the credit risk of mortgages in a significant emerging market. For this purpose, we investigate a multitude of variables that explain the characteristics of the loans, the demographics of the borrowers, and macroeconomic factors. We employ SHapley Additive exPlanations (SHAP) values in conjunction with five different tree-based machine learning methods, as well as the least absolute shrinkage and selection operator (LASSO) in conjunction with logistic regressions. Our findings, which are robust across two sampling schemes, reveal that while demographic variables are significant and important, loan-specific and macroeconomic variables are the most crucial in explaining mortgage defaults. As existing literature on mortgage default has primarily focused on advanced markets, we aim to bridge this gap by concentrating on emerging market data. We also share our code, which we hope will encourage others to utilize the methods we have applied.
... All of that leads to the deprivation of the population to live in suitable homes, but there is a large number of empty houses available in Istanbul that have not been sold until now and the estimated number of them is near to one million houses. (Aslan and Dincer, 2018). After the global crisis in 2008, the arose of global liquidity abundance significantly and that affected the economic growth in a positive way especially in Turkey when the real estate certificate system saw the light and applied a low-interest rate. ...
The study investigates the impact of the construction sector on the gross domestic product by taking into consideration the interest rate and tax effects where these factors played big roles in growing the economy and construction sector. The study's purpose is to explore the type of relationship between the construction sector and the GDP growth in a bidirectional way through using statistical analysis that measures the regression, cointegration and causality test where these methods will give results of the relationship, long run, short-run and causality. Also, the study contains other different variables that are related to the construction sector and GDP such as interest rate, taxation, industry sector, investment, and foreign direct investment where these variables were investigated through four special models. The study explored Turkey and other 11 countries of the European Union from 1988 to 2019 that were chosen based on Gross Domestic Product and the Purchasing Power Parity. The data of the study was collected from official databases and analyzed by a panel system with four main steps to Eliminate any unrealistic results. The study found negative long-run estimates between the construction sector and GDP in a bidirectional way in Turkey and a unidirectional way in Spain. The interest rate and taxation play a role in GDP and the construction sector through long-run estimates and causality in most countries of the study where the interest rate affect the GDP by - 0.083% and on construction sector by - 0.039% in Turkey, in Portugal by -0.29% and in Spain by -0.19%. The construction sector has negative estimates with the industry sector by -1.48% in Germany, -2.40% in Sweden and negative estimates with foreign direct investment by -0.27% in Spain, but the construction sector has positive long-run estimates with investments in Turkey by +37%, +36% in France, 51% in Germany, +48% in Greece, +39% in Portugal and by +58% in Spain. More results are detailed in the analysis chapter for each country and for the total panel.
... Firstly, based on the historical account of Turkey's housing market, it is argued in the paper that the financialization of space in Turkey is realized through mortgage market expansion (Erol 2019, Aslan andDinçer 2018), and the state has taken an active role in the management of this process with the restructuring of some governmental institutions. In other words, this paper claims that the urbanization of Turkey has entered a new era with the structural transformation that took place following the 2001 crisis, through which the state facilitated the reproduction of capital via the financialization and liquidation of space by the introduction of various new tools. ...
... Erol (2019) examines both mortgage market trends and economic industry indicators. Aslan and Dinçer (2018) examine the structure of mortgages in Turkey and discuss their role in the financialization of space. Empirical findings of their study indicate that household indebtedness increased with the introduction of mortgage loans, which have been an important factor in the financialization of the housing market. ...
Housing is a complex phenomenon with social, economic and political dimensions. It is also an expensive fixed asset that can be used and consumed for centuries. Due to the considerable amount of capital required for the realization of housing projects, a mutually supportive relationship is established between the finance and the housing sectors. Mortgage loans are the major tools provided by financial institutions to households for acquisition of housing. On the other hand, mortgage loans usually constitute the largest debt item of a family and are highly effective on the organization of their everyday lives as they are given on their future incomes. Given the increasing trend in the use of mortgages by households in Turkey since 2007, when mortgage law was adopted, this paper offers two key insights. Firstly, based on the historical account of Turkey’s housing market, it is argued in the paper that the financialization of space in Turkey is realized through mortgage market expansion, and accordingly the effects of financialization on the housing market is investigated. Secondly, it demonstrates that the financialised housing market in Turkey is highly dependent on family relationships and their financial supports. Research findings also indicate that despite the growth of the mortgage market, owner-occupation has declined in total and use of mortgage was concentrated within the middle income groups. The study was conducted in Istanbul, the largest metropolis of Turkey, using a mixed method approach, and investigated the daily life experiences of mortgage debt owners by combining different sets of data to present a dynamic discussion arena for future studies.
... Large-Scale Urban Regeneration Project Manager, Istanbul market (Aslan & Dinçer, 2018;Erol, 2018;Erol & Patel, 2004;Karaçimen & Çelik, 2017;Topal et al., 2019;Yesilbag, 2016). We can interpret these changes as an illustration of Harvey's argument (1982), that crises of overaccumulation in one sector can lead to the switching of capital from the first circuit (production) to the second (built environment investments). ...
... This has effectively transformed investment in the built environment into a key economic sector in a relatively short space of time (for a similar argument in relation to China, see Wu et al., 2020). That said, housing financialisation in Turkey nonetheless shows characteristics of a 'truncated' financialisation process (Fernandez & Aalbers, 2020): in other words, it involves a limited volume of mortgage finance and asset-backed securities ( Interviews 13, 14, 16;Aslan & Dinçer, 2018;Erol, 2018;Erol & Patel, 2004;Karaçimen & Çelik, 2017). The truncation of the process in Turkey is the result of two main dynamics: first, a volatile economy combined with rapid political change that acts as a deterrent to international investors; second, the historically embedded relationship between the state, investors, construction companies/builders, and residents that has developed gecekondu housing in the absence of welfare housing provision. ...
... As a result of the new mortgage law, middle-income households started to get involved in the housing market, resulting in an increase in new residential sales by using mortgage to 34% in 2016 (Aslan & Dinçer, 2018). While demand is growing because of rising middle-class urban populations who increasingly see housing as an investment (Table 2), access to such mortgages is far from universal, due to volatility in inflation, and the prevalence of precarious, low-paid, and unstable work ( Figure 2). ...
What is the relationship between the state and housing financialisation? Much of the literature describes the state playing a role to promote the regulatory, legislative, and financial conditions needed to allow global financial capital to penetrate land and property markets. I build on these arguments to develop in what ways the state is playing an active role in housing financialisation in Turkey. I suggest that the Turkish national state has deliberately, actively, and forcefully pursued housing financialisation by (i) introducing new legislation; (ii) creating financial frameworks to encourage speculation by domestic and international capital on land and housing as assets (iii) enclosing public land and exploiting informal types of tenure; (iv) assetising land and housing by developing revenue-sharing urban regeneration projects; and (v) using coercive legal and penal force to criminalise informal development, and to quell resistance to state-led regeneration. My conclusions add weight to Christophers’ contention that the role of the state needs to be reconceptualised to capture its direct involvement in housing financialisation.
... Çelik, Topal, and Yalman (2016) explore the relation between financialization and housing by applying a systems-of-provision approach and emphasizing the role of the state and integration with global capitalism. Aslan and Dinçer (2018) 1994, 1998, and 2001 to the gross domestic product of previous years was, respectively, 11.9%, 4%, and 15.1% (Boratav, 2003, p. 180 (2010), and Sarımehmet-Duman (2014). 14. ...
... 16. See Aslan and Dinçer (2018) for a detailed analysis of the role of mortgage loans in Turkey's financialization process. 17. ...
Financialization influenced the Turkish economy and housing industry mostly through financial liberalization moves and soaring capital inflows. It both increased household liabilities and mortgage loans dramatically and offered various facilities for the housing industry. Relevant legal regulations not only helped the Turkish housing industry prosper but also eased its integration into the national and global financial system. In addition, political implications constituted a strong motivation for governments to attach special importance to the housing industry. I examine housing financialization as an integral part of the accumulation model of the Turkish economy and argue that the housing industry lies at the very heart of the contradictions of this model. The large-scale capital inflows both intensified the dependency on foreign resources and increased the role of the domestic demand. This is the main contradiction of the accumulation model; it manifests itself in the interest rate dilemma and is also critical for housing financialization in Turkey because the characteristics of this model are especially valid for the housing industry. Moreover, not only do the contradictions of the accumulation model disrupt the housing industry, but also the characteristics of the housing industry contribute to the disruption of this model.
... Since then, they have pursued a persistently expansionary trend, reaching a total volume of TL188 billion by the end of 2018. Along with a conducive macroeconomic climate, the expansion has gained a considerable stimulus from the Housing Finance Law of 2007, which introduced the mortgage system in Turkey, thereby enabling banks to provide long-term low-interest housing credits to consumers (Aslan & Dinçer, 2018). Besides allowing the purchased dwelling unit to be used as a collateral for the loan, the law came with a comprehensive package that included measures to shorten and ease the foreclosure process in the case of default, introduced complementary institutions such as real estate appraisal services and insurance companies, and defined the legal ground for the introduction of mortgage-backed capital market instruments and secondary market institutions into the mortgage system (Erol, 2018, pp. ...
This study presents an assessment of the political economy of housing in contemporary Turkey in conversation with the main issues of the financialization of housing (FoH) debate. Since the early 2000s, the built-environment scene in Turkey has been undergoing a radical transformation toward a situation characterized by growing penetration of financial concerns into the housing sector. FoH in Turkey, however, is remarkably different from typical Global North examples in terms of the current depth of the process, prevalent mechanisms, leading components, and driving actors. The Turkish case is characterized by a relatively small financial footprint generating an unprecedented construction boom, under the command of a decisive and persistent state strategy. Going well beyond the enabling/facilitating role of states covered in the existing literature, this strategy represents a case in which the state itself effectively drives the housing–finance nexus.
This paper investigates the rise of household debt and its impact on class relations and the sustainability of capitalism. The analysis begins with a historical perspective on the factors contributing to household debt growth, such as declining wages, increasing pressure on organized labor, and the need to maintain consumer demand in the face of declining profit margins. The paper then compares the dynamics of household debt across countries and examines Türkiye's case in a global context. The findings suggest that unsustainable household debt levels, declining wages, and rising inequality; raise doubts about the long-term sustainability of capitalism as we know it. The paper advocates for rethinking economic policies and practices, prioritizing the well-being and prosperity of the majority.
We identify in this chapter the contradictory objectives of monetary policy under an authoritarian mode of financialization (AF) in Emerging Market Economies (EMEs) where the executive branch intervenes directly in monetary policy, banking supervision and retail banking. We interpret AF as a statist-authoritarian attempt to manage the vulnerabilities of credit-based growth strategies under subordinate financialization: following Marxist theories of the state, we argue that instead of providing political-economic stabilization, statist authoritarianism merely internalizes class conflicts within the state apparatus spurring accumulation and legitimation dilemmas for the state. We illustrate two divergent crisis trajectories of AF in Hungary and Türkiye in the 2020-–22 period by showing how executive centralization fails to solve the increasingly contradictory objectives of stabilizing sovereign and private debt markets. Instead, we observe enhanced incoherence in monetary policy and a diminishing capacity of AF regimes to shore up rentier social contracts. Although both cases face accumulation and legitimation dilemmas in 2022, we explain the consolidation of inflationary and disinflationary monetary policies with differences in debt profiles, social blocs, and external financing conditions.
This article contributes to the literature on the role of the state in land-based accumulation by presenting an explanatory framework on the case of contemporary Turkey, a case marked by an unprecedented construction boom that carries the distinct mark of the ruling AKP (Adalet ve Kalkınma Partisi, or Justice and Development Party). Land-based accumulation has constituted a defining aspect of the political economic setting of the AKP era. An investigation of the motivations behind this strategy reveals that it has been instrumental for the ruling party’s political agendas. Through land-based accumulation, the AKP has been able to cultivate a new generation of firms in the construction industry with connections to the party, consolidate its power among domestic capital and develop new mechanisms to finance party politics. Furthermore, symbolic and material manifestations of land-based accumulation have been abundantly used in the party’s propaganda machinery to provide ideological legitimation. Overall, the AKP’s authoritarian grip on power has been forged through the political-ideological resources provided by land-based accumulation. Contrary to the widespread narratives of weakening, passive or merely facilitating states, the case of Turkey brings to the fore an instance of boosting state agendas through land-based accumulation. My findings underline the need to combine capital-switch arguments with a Gramscian political conjunctural analysis for a fuller understanding of the role of the state in land-based accumulation, and point to the urban roots of neoliberal authoritarianism.
