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ABSTRACT: Housing is the most important asset in the portfolio of most households. For all households it is an important determinant of quality of life. It is a relatively illiquid investment, with an uncertain capital value, and it is generally highly leveraged, which makes it a potentially important channel of transmission of monetary policy. On the other hand, housing finance is a crucial importance to the macro-economic system as mortgage loans account for a large proportion of bank lending. Indicators related to mortgage market activities and banks' exposures to real estate lending are also useful indicators for monitoring the health of the banking sector. This article aims to present a comparative analysis of the housing market structure in Romania and Turkey before and after the global financial crisis.
Keywords: Housing Market, Mortgage Loans, Bank Lending, Financial Crisis, Romania, Turkey
JEL codes: E30, E44, L74, R10, R20, R30
Introduction
The framework for analyzing the housing structure consists of four elements. These are the political, economic, social and environmental factors that impact directly on housing. Physical and political context consist of natural environment, existing housing stock, government structures and housing policies; whereas economic and social contexts consist of national economy, levels of income, bank lending, mortgage loan rates, demographics and consumption patterns (fig. no 1).
Housing is accepted as a fundamental right in the international arena according to the Universal Declaration of Human Rights (1948). Moreover HABITAT II Conferences organized by United Nations have underlined the importance of housing with a main theme of UN Habitat Agenda as "enough housing for everyone" (Habitat II, 1996). Housing matters as a major quality of life issue. Choice in housing is a key component of any democratic society. The way that housing is financed can have a major, positive, impact on the national economy, financial markets and the quality of life. A soundly financed housing sector can play a major role in economic growth and economic stabilization, through the creation of jobs in construction and materials, demand for new enterprises, the financial sector, and indirect impacts through subsidiary activities, including infrastructure, materials, furnishings and services. A well developed housing sector can significantly mitigate unemployment, since housing shortages can severely restrict labor mobility. A developed housing finance system allows...