Cluster and Forecasting Analysis of the Residential Market in Turkey: An Autoregressive Model-Based Fuzzy Clustering Approach

International Journal of Housing Markets and Analysis, Vol. 13 No. 4, 2020; DOI: 10.1108/IJHMA-11-2019-0110

Posted: 18 Aug 2020

See all articles by Metin Vatansever

Metin Vatansever

Yildiz Technical University

Ibrahim Demir

Yildiz Technical University

Ali Hepsen

Istanbul University - Faculty of Business Administration, Department of Finance

Date Written: June 22, 2020

Abstract

Purpose – The main purpose of this study is to detect homogeneous housing market areas among 196 districts of 5 major cities of Turkey in terms of house sale price indices. The second purpose is to forecast these 196 house sale price indices.

Design/methodology/approach – In this paper, the authors use the monthly house sale price indices of 196 districts of 5 major cities of Turkey. The authors propose an autoregressive (AR) model-based fuzzy clustering approach to detect homogeneous housing market areas and to forecast house price indices.

Findings – The AR model-based fuzzy clustering approach detects three numbers of homogenous property market areas among 196 districts of 5 major cities of Turkey where house sale price moves together (or with similar house sales dynamic). This approach also provides better forecasting results compared to standard AR models by higher data efficiency and lower model validation and maintenance effort.

Research limitations/implications – In this study, the authors could not use any district-based socioeconomic and consumption behavioral indicators and any discrete geographical and property characteristics because of the data limitation.

Practical implications – The finding of this study would help property investors for establishing more effective property management strategies by taking different geographical location conditions into account.

Social implications – From the government side, knowing future rises, falls and turning points of property prices in different locations can allow the government to monitor the property price changes and control the speculation activities that cause a dramatic change in the market.

Originality/value – There is no previous research paper focusing on neighborhood-based clusters and forecasting house sale price indices in Turkey. At this point, it is the first academic study.

Keywords: Forecasting, House price index, Fuzzy model, Model-based time series clustering, Turkish housing market, Visual cluster validity

Suggested Citation

Vatansever, Metin and Demir, Ibrahim and Hepsen, Ali, Cluster and Forecasting Analysis of the Residential Market in Turkey: An Autoregressive Model-Based Fuzzy Clustering Approach (June 22, 2020). International Journal of Housing Markets and Analysis, Vol. 13 No. 4, 2020; DOI: 10.1108/IJHMA-11-2019-0110, Available at SSRN: https://ssrn.com/abstract=3632908

Metin Vatansever (Contact Author)

Yildiz Technical University ( email )

Davutpasa Mh., Esenler
Besiktas, Istanbul 80750
Turkey

Ibrahim Demir

Yildiz Technical University ( email )

Davutpasa Mh., Esenler
Besiktas, Istanbul 80750
Turkey

Ali Hepsen

Istanbul University - Faculty of Business Administration, Department of Finance ( email )

Istanbul
Turkey

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