Housing cycles

We know that Amer can bus ness cycles have been or started as hous ng cycles. Because the

Amer can mortgage s typ cally of 30-years matur ty – 22-years ‘effect ve durat on’ - t has affected everyth ng s nce WWII. Mortgage sales were down aga n n February, the s xth month n a row, fall ng by 27.8 percent year-on-year. Th s makes two quarters and prov des enough data to announce the through of a hous ng cycle. New home sales are also down by 3.3 percent annually.

Mov ng averages po nt to a 4 percent decl ne overall compared to last year. Cons der the

REIDIN res dent al property pr ce ndex.

It sn’t adjusted for qual ty, .e. t s not a hedon c ndex. It s a more pr ma fac e ndex that g ves you raw data so to speak. The Istanbul and Turkey compos tes have been almost juxtaposed

recently.

Pr ces are down n real terms, sales are down, rents are down. Costs are up and hous ng loan rates

are h gher. W th hous ng loan rates hover ng around 15 percent, although the Turk sh mortgage w th 10 years matur ty looks noth ng l ke the Amer can mortgage, there s no way the cycle redresses tself and heads north anyt me soon. Yes, t looks l ke the dawn ng of a hous ng cycle.

It w ll generate a marked negat ve wealth effect. Th s s also one potent al reason why elect ons are to be held early.