Since I just posted my columns for the past three weeks to the blog, I have started to get comments from readers following the articles on the blog (as opposed to the Daily News site). Hakan Tarakci, an old friend and die-hard Besiktas fan, has a question and a comment on the August 3 column, which he entered on Facebook.
First, the question:
As for Hakan's comment:
First, the question:
is there a website which publishes median house prices and median household incomes in Turkey. I want to see if Turkey is more unaffordable than Australia or whether Oz is the world leader.And the answer: Yes, Garanti has a useful site on prices. As for incomes, TURKSTAT has household surveys, but they wouldn't give the raw data to you even if you scalp them (as in the latest Tarantino movie), as I will allude to in a later post. Cigdem XXXXX, at a university in DC, has some papers on that survey, if I am not mistaken- do an SSRN search and lemme know if you find something useful.
As for Hakan's comment:
Another thing: In Australia, markets are pricing in a 2% rise in the next 12-18 months. Looks like the discrepancy between investors and central banks is similar all around the world.Very good point; let's wait and see who gives in. I don't know about Australia, but I am quite sure that Turkey is heading to tears in heaven, with the Bank giving in sometime 2010 big time.
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Thanks Emre for the links. They are somewhat helpful but I am surprised by the lack of quality data about incomes and house prices. The name of the researcher is Cigdem Akin, btw.
I did some back of the napkin calculations with rough assumptions. Looking at Garanti's website, the average price per m2 is about 1100 TL in Istanbul. If we assume a median house would be about 80 m2 (it's probably smaller but I'd like to be conservative in my estimates), the median house would be roughly 90,000 TL.
As for incomes, the information is really sketchy so I'll just make some assumptions here. In 2008, Australia's GDP per capita (nominal values) in US$ was 47,400 and Turkey's was US$10,472, according to IMF. The median Australian household income is about AU$60,000. If we assume that the ratio of household income to per capita GDP is about the same in Australia and in Turkey, that puts the median household income in Turkey at roughly AU$13,255 or about 16,000 TL, using the current 1.2 exchange rate.
Therefore, the median house is about 90,000 TL and the median income is about 16,000, which implies a house price/income ratio of roughly 5.5, a much lower ratio than the 7.5 (closer to 8 these days) we have in Australia.
It's official then: Australia is the richest banana republic in the world.
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