How to Read Housing Price Indices

Housing price indices measure the average change in home prices in a country or city over time. In Turkey, the most widely used index is the housing price index produced by the Central Bank of the Republic of Turkey (TCMB).

What does the index measure?

Indices generally compare prices from appraisal reports or sale transactions while holding the home's characteristics constant. The goal is to answer, 'how much did the price of a home with the same characteristics change.'

Nominal and real growth

Nominal growth shows how much prices rose in Turkish lira terms. Real growth is growth adjusted for inflation. In periods of high inflation, home prices can rise fast in nominal terms while falling in real terms, meaning a home can lose value in purchasing-power terms.

Can you update your own home's value using the index?

Partly. The index shows the average; a specific neighborhood's, or even a specific building's, price trend can diverge noticeably from that average. Use the index for the general direction, and rely on current comparables and an appraisal for a precise value.

Things to watch for

• Indices are calculated from backward-looking data and published with a lag.
• In areas with heavy urban transformation activity, the average can be misleading because new stock enters the mix.
• Indices based on listing prices can run higher than those based on actual completed sale prices.