Fault Lines of Value: The Impact of Earthquake Risk on Istanbul Housing Market
| Title: |
Fault Lines of Value: The Impact of Earthquake Risk on Istanbul Housing Market |
|
|---|---|---|
|
Number: |
25/17 |
|
|
Author(s): |
Oğuzhan Çepni, İsmail Genç, Lokman Gündüz, Muhammed Hasan Yılmaz |
|
|
Language: |
English |
|
|
Date: |
December 2025 |
|
|
Abstract: |
Using a unique dataset of house prices and a difference-in-differences methodology, we find that households in Istanbul reassessed the risks associated with earthquakes following the Kahramanmaraş Earthquake Sequence on February 6, 2023. The increase in both housing prices and rental rates was relatively subdued in Istanbul neighborhoods with high earthquake risk compared to those in low-risk areas. Furthermore, houses built before the Turkish Earthquake Code of 2007 are heavily discounted in high-risk areas relative to those constructed afterward. Finally, the earthquake risk premium observed in house prices in low-risk areas was smaller in percentage terms for more expensive neighborhoods. These findings have important policy implications for the implementation of earthquake-resistant measures in Türkiye. |
|
|
Keywords: |
Difference-in-differences, Kahramanmaraş earthquake, Earthquake risk premium, House prices |
|
|
JEL Codes: |
D80; Q54; R21; R30 |
|
