Value of Property: Status Versus Function
||Esen, Bugra Kagan
||Value of Property: Status Versus Function
||21st Annual European Real Estate Society Conference in Bucharest, Romania
||It has been more than a decade now, since the inflow of foreign money has created a real estate boom in Turkey, which was a globally safe harbor. In addition with the lower rate mortgage loans, Turkey’s property values have skyrocketed. Many independent research works show that real estate is by far the best investment choice of the Turkish people. As they become wealthier, they tend to buy more and more properties. It is interesting to analyze; what is the motivation of buyers when they consider such a property purchase and what kind of properties do the Turkish people demand as they obtain surplus money?The two questions may have some many answers, which can be reduced to two: function and status. For single property owners, function generally means a larger, safer, warmer, living place with better features. Function, for multiple property owners, also means a money flow from monthly rent.Status, however, is a more interesting issue. Some properties in major cities are purchased for prestige, where their values cannot be justified by functionality or rent inflow. This is also because some properties are limited in quantity or may not be available at once. Waterside residences in Istanbul for instance, may be sold for up to tens of millions of Dollars. Every major Turkish city has such extremes, which are also high in number. This Paper’s contribution to the real estate sciences may be twofold: It questions the property valuation parameters in a more macroeconomic awareness and it may theoretically help well-off individuals find different ways of investment.
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||Q : Real Estate Valuation
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