5 reasons for the disorder in the housing market – Tejaratnews
According to Tejarat News, the housing market, in line with other sectors of Iran’s economy, has not spent the last few years in a good state. This productive part of the economy is in its several years of recession and according to statistics, it has been on the slope of price increase for at least the last five years.
A large number of Iranian households, affected by these conditions and the reduction of purchasing power in general, have been disappointed in buying a house throughout their lives; This is despite the fact that the prices in the rental market have risen to an alarming level and people have to either move to lower areas or live in a lower quality house after each time the house contract ends.
But from a more detailed look, what problems is the housing market facing these days?
Recession in construction
The main reason for the stagnation in the construction sector can be considered the lack of interest of mass builders to enter this field. According to reports, the profit of mass producers has decreased by 28%; This has caused these housing activists to turn to work in another field in the last few years.
Of course, this factor cannot be ignored that the demand for newly built houses has decreased due to the high price in the housing market, and according to the statistics of the Central Bank, people now show a greater desire to buy older houses.
Increase in the price of construction materials
Iran’s inflation has experienced a dramatic increase in recent years and has brought many problems to the economy. One of these problems can be seen as the increase in the price of construction materials. Finally, this price increase increases the final price of apartments and makes it more difficult for builders to buy them every day.
The statistics of the Iranian Statistics Center show that the price of construction inputs has increased by 29% from the summer of last year to the summer of this year.
If this statistic is examined in more detail, we have seen a price increase of 4.21% in the cement group, 5.39% in the electrical installations group, 8.36% in the mosaic, tile and ceramic group, and 8.56% in the building painting group. The glass group has grown more than other groups with an increase of 3.83%.
lack of land
The lack of water and the problem of land subsidence in recent years have greatly reduced the land suitable for construction; Even the government is facing this problem to build units related to the National Housing Movement project, especially in big cities, and has promised to build them in nearby towns.
Currently, the lack of land and its high cost in the main tissues of the city has led to an increase in the cost of apartment production, which also adds to the problems of owning a house.
Industrial gas outage
With the onset of the cold season and the beginning of the harsh winter, some industries have faced gas and electricity outages. These cases may cause problems in the production of construction materials such as cement and steel and increase their prices. As it was said, the increase in the price of materials will eventually increase the finished price of the units.
Lack of housing pricing supervision
With the increase in the inflation rate, inflationary expectations are also found in the society. Now, under the influence of this factor as well as the increase in the price of the dollar, the owners raise the price of their properties without any economic basis. Since there is no proper monitoring of the housing market, this event gradually increases the false price of housing.
Solving housing problems
Some believe that solving housing problems comes back to solving its internal problems, but organizing this key and productive part of the economy depends on the general conditions of the economy and its external obstacles must also be solved.
As long as inflation, inflationary expectations in the society and increase in the price of the dollar continue, the housing market will remain stagnant and its price will increase day by day.
According to the latest reports of the Central Bank, the average housing price in Tehran has reached nearly 50 million, and experts believe that if the current situation continues, it will experience a higher upward slope next year.
Read the latest housing news on Tejaratnews housing news page.