Examination of Income Inequality in Regional Housing Market Dynamics: Evidence from NUTS 2 Regions in an Emerging Economy

Fluctuations in asset prices significantly influence the allocation of wealth across different income groups and regions. This study examines the influence of income groups, stock market investments, and various macroeconomic factors on housing prices in different regions of Türkiye from 2015 to 2024, utilising data sourced from the Nomenclature of Territorial Units for Statistics 2 (NUTS 2) regions. To precisely capture region-specific dynamics, the region-based system generalised method of moments (GMM) estimator is employed, whereas the system GMM estimator is utilised for panel data encompassing the all region. The results indicate the varying effects of low-and high-income households on housing prices. The research underscores the necessity of formulating housing and economic policies that address regional economic disparities, highlighting the substantial relationship among housing affordability, mortgage interest rates, stock investment levels, and housing prices, in light of the marked distribution of wealth inequality. The research has implications for micro and regional policy within the framework of a developing economy. Additionally, it aims to enhance the existing literature by providing empirical insights into regional mechanisms and research related to income distribution and asset price fluctuations in emerging markets.