t24.com.tr
Gold Price Surge Fuels Housing Price Increase in Turkey
A TCMB analysis shows a 77% rise in international gold prices (Sept 2023-Apr 2025) increased gold's share in Turkish deposits, boosting wealth and causing an 11% average increase in housing unit prices and higher automobile sales in provinces with high gold holdings.
- How did the increase in gold-based wealth differentially affect the housing and automobile markets in Turkey?
- The study examined the impact of this gold-fueled wealth increase on Turkey's housing and automobile markets. It found a positive correlation between the proportion of gold in deposits and house prices post-September 2023, indicating that increased gold holdings directly influenced housing costs. This effect was more pronounced in mortgage-free home sales.
- What is the immediate impact of the 77 percent increase in international gold prices on Turkey's housing market?
- A recent analysis by the Central Bank of the Republic of Turkey (TCMB) reveals a significant increase in gold prices between September 2023 and April 2025, approximately 77 percent, driven by global geopolitical uncertainty and increased central bank gold purchases. This surge led to a rise in gold's share of domestic deposits, boosting wealth for those with substantial gold savings.
- What are the long-term implications of this gold-price-driven wealth effect on the Turkish economy, considering the inelasticity of the housing market?
- The analysis used a difference-in-differences approach to isolate the impact of gold price increases on the housing market, controlling for other time-invariant factors. The results suggest an average 11 percent increase in housing unit prices in provinces with average gold deposit ratios after the third quarter of 2023. Conversely, the relatively elastic supply of automobiles resulted in increased sales rather than price increases.
Cognitive Concepts
Framing Bias
The analysis presents a clear narrative linking the rise in gold prices to increased demand in the housing and automobile markets. The headline and introduction clearly state this connection. However, this framing may potentially downplay other contributing factors and could benefit from explicitly acknowledging limitations and alternative perspectives.
Bias by Omission
The analysis focuses on the relationship between gold prices and the housing and automobile markets in Turkey. While it acknowledges the impact of gold price increases on wealth, it doesn't delve into potential alternative explanations for the observed changes in these markets. Omission of factors such as inflation, interest rates, or government policies could limit the understanding of the overall market dynamics. Further, the analysis is limited to the specific time frame and geographical area studied.
Sustainable Development Goals
The analysis shows that the increase in gold prices led to a significant increase in wealth for those who hold a substantial portion of their savings in gold. This increase disproportionately benefits wealthier segments of the population, potentially exacerbating existing inequalities. However, the increased spending on housing and automobiles resulting from this wealth increase could stimulate the economy and create opportunities for some.