Rental price convergence in a developing economy: New evidence from nonlinear panel unit root test

Abstract

We examine the hypothesis of nonlinear rental price convergence using relative rental price index of three major cities of Turkey namely, Istanbul, Izmir, and Ankara span from the period from January 1994 to February 2010. Our results indicate that all cities exhibit rental price convergence towards its national mean level for the period of January 1994 to December 2004. In contrast, none of the cities show evidence of convergence from January 2005 to February 2010. The evidence clearly shows rental price divergence in Turkish property market.

SANTRUKA

Darbe tikrinama triju pagrindiniu Turkijos miestu — Stambulo, Izmiro ir Ankaros — netiesines rentos kainu konvergencijos hipoteze nuo 1994 m. sausio men. iki 2010 m. vasario men., taikant santykini rentos kainu indeksa. Tyrimu rezultatai rodo, kad nuo 1994 m. sausio men. iki 2004 m. gruodžio men. visuose miestuose rentos kainos artejo prie vidutinio nacionalinio lygio. Priešingai, tokios konvergencijos irodymu negauta ne vieno miesto atžvilgiu nuo 2005 m. sausio men. iki 2010 m. vasario men. Faktai aiškiai rodo Turkijos nekilnojamojo turto rinkos rentos kainu divergencija.

Keywords:

• Turkey
• Housing industry
• Major cities of Turkey
• Panel unit root test
• Rental price movement