Financialization Of Housing And Mortgage Debt Repayment Strategies Of Households In Turkey

Ahmet Suvar ASLAN


Housing is a complex phenomenon with social, economic and political dimensions. It is also an expensive fixed asset that can be used and consumed for centuries. Due to the considerable amount of capital required for the realization of housing projects, a mutually supportive relationship is established between the finance and the housing sectors. Mortgage loans are the major tools provided by financial institutions to households for acquisition of housing. On the other hand, mortgage loans usually constitute the largest debt item of a family and are highly effective on the organization of their everyday lives as they are given on their future incomes. Given the increasing trend in the use of mortgages by households in Turkey since 2007, when mortgage law was adopted, this paper offers two key insights. Firstly, based on the historical account of Turkey’s housing market, it is argued in the paper that the financialization of space in Turkey is realized through mortgage market expansion, and accordingly the effects of financialization on the housing market is investigatedSecondly, it demonstrates that the financialised housing market in Turkey is highly dependent on family relationships and their financial supports. Research findings also indicate that despite the growth of the mortgage market, owner-occupation has declined in total and use of mortgage was concentrated within the middle income groups. The study was conducted in Istanbul, the largest metropolis of Turkey, using a mixed method approach, and investigated the daily life experiences of mortgage debt owners by combining different sets of data to present a dynamic discussion arena for future studies.

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