On the roots of housing bubbles

Regions or economies with a low share of owner-occupied houses are more prone to housing bubbles that are driven by locally unstable rent dynamics, research published by the Central Bank of Turkey argues.

The main result of the research, which is co-authored by Erdem Basci, a deputy governor at the central bank, hinges upon there being a low degree of substitutability between housing services and other commodities together with a low share of owner-occupied houses.

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