The Impact of Large Investors on the Portfolio Optimization of Single-Family Houses in Housing Markets

Yılmaz, Bilgi
Korn, Ralf
Kestel, Sevtap Ayşe
As a consequence of the real estate market crash after 2008, large investors invested a significant amount of wealth into single-family houses to construct a portfolio of rental dwellings, whose income is securitized in the capital. In some local housing markets, these investors own remarkable numbers of single-family houses. Furthermore, their trading activities have resulted in a new investment strategy, which exacerbates property wealth concentration and polarization. This new investment strategy and its portfolio optimization inspire curiosity about its influence on housing markets. This paper first aims to find an optimal portfolio strategy by employing an expected utility optimization from the terminal wealth, which adopts a stochastic model that includes a variety of economic states to estimate house prices. Second, it aims to analyze the effect of large investors on the housing market. The results show the investment strategies of large investors depend on the balance among economic state, maintenance cost, rental income, interest rate and investment willingness of large investors to housing and their effect depends on the state of the economy.
Computational Economics


Understanding real estate bubbles: an analysis of the recent trends in the Turkish housing market
Karasu, Mustafa Nusret; Cömert, Hasan; Department of Economics (2015)
The main aim of this thesis is to determine whether there is a real estate bubble in Turkey recently, where the house prices are increasing rapidly. In order to do this, the thesis tries to define the bubble concept, by reviewing literature. The common view among economists is that bubbles are deviation of prices from their fundamentals which is associated with sudden increases in prices. We usually witness harsh economic crises after the bursts of bubbles in economies and this constitutes the source of the...
The Effect of Macro-Economic Factors on Housing Markets: US Case
Yılmaz, Bilgi; Kestel, Sevtap Ayşe (null; 2017-05-26)
The real estate market is one of the leading and locomotive markets in national economies due to its high dependence on domestic capital, its creation of high added value, the magnitude of its employment potential, and the strong relation to the other markets. And the housing market is one of the biggest submarket of real estate market and it is a massive factor in householder’s consumption; therefore, it is one of the biggest components in the basket of goods used for calculating the consumer price index (...
The process of intergenerational transmission of housing wealth
Kayıket, Aslı; Balamir, Murat; Department of City and Regional Planning (2003)
For several decades, Turkey has witnessed increasing investments in housing. There is evidence that some households benefited from this increase. The transfer of housing assets today is also an extensive social and economic phenomenon different from the traditional processes. There are several issues related to this process the most significant being the universal concern for its contribution to wealth polarization. Supply impacts in the markets are other aspect of the same process. Since greater accumulati...
Analysis of portfolio diversification between REIT assets
Kestel, Sevtap Ayşe (2014-03-15)
REIT assets have gained recognizable attention in capital markets in recent decades and their development in time speaks of the impact of interaction among portfolios of REITs assets. This paper aims to analyze cointegration structure between and within different types of REITs and investigate the influence of cointegrated assets on portfolio indicators. A portfolio-optimization analysis is done based on the bivariate relationship among asset prices for the years 1995-2008. Uni and bidirectional causalities...
A study of housing prices in Ankara
Karagöl, Tuba; Türel, Ali; Department of City and Regional Planning (2007)
Housing price studies is the first step of housing market analysis. Prices are determined at the intersection point of supply and demand curves, which determine equilibrium point that represents equilibrium price and quantity level. At a point in time demand factors are more important in determining the prices because short-run supply curve is almost vertical. However, in the long run supply of housing, and its certain attributes, will increase if price premium arises in the previous periods. In most of the...
Citation Formats
B. Yılmaz, R. Korn, and S. A. Kestel, “The Impact of Large Investors on the Portfolio Optimization of Single-Family Houses in Housing Markets,” Computational Economics, vol. 1, no. 1, pp. 1–20, 2022, Accessed: 00, 2022. [Online]. Available: