A new narrative of the reason for the increase in housing prices in Tehran – Tejaratnews

According to Tejarat News, these two numbers clearly show that land inflation has moved faster than housing inflation since 2016. In other words, the growth of land prices has exceeded the growth of housing prices, and many believe that the unprecedented increase in land prices is one of the main factors in the increase in housing prices in Tehran.

As the economic world reported, the ratio of land to housing prices in Tehran was below one during the 70s, which means that not only the land and Kalangi properties were not more expensive than the housing in those years, but also cheaper. This ratio reached nearly one in the 80s, and in fact, the average price of each square meter of land and apartment in Tehran was almost equal. But since the 90s, this ratio gradually increased to more than one; The event that is caused by the acceleration of land inflation due to the nature and nature of this market is caused by the inherent limitation of land supply in cities and this issue also affects the price of land and slum properties with the ability to demolish and renovate in the capital.

But before the beginning of the 90s, the price of land was either lower than the price of housing or equal to it. But since the 90s, this ratio has been reversed. According to the latest published official statistics of the average land price in Tehran city transactions related to the winter of 1400, the ratio of land price to housing at that time reached an unprecedented value of 1.55, which was considered a record and showed the speed of land price growth in Tehran. It has been higher than the growth of housing prices.

Why is land price increase important?

The importance of the price of land and the unprecedented growth of its price is important in what way? From the point of view that the inflation of construction materials has been equal in two consecutive seasons (winter 1401 and spring 1402) and the growth rate of material inflation has practically reached zero. Of course, the inflation of construction materials is still 40%, but its growth rate has stopped. Even though the inflation rate of construction materials is practically constant, housing builders still face two main challenges in building housing, one of these challenges is the increase in wages and the other is the increase in land prices. In other words, a fault has been created between housing and land, which is constantly increasing, and this fault affects the increase in housing prices.

On the other hand, the point that should be noted is that the increase in housing construction costs has caused the profit of builders in this area to decrease, and the increase in land prices is one of the most important factors in reducing the profit of construction. If the land inflation was controlled like housing inflation, it was possible to increase the construction profit margin in conditions of relative calm in the building materials market, but now this profit margin is about 35% for a two-year or at least 18-month investment (of course, with the gradual injection of financial resources). ) Is. Although this profit margin has slightly improved compared to about 30% in the dark and inflationary days of the housing market in the era of the recent surge, it is still not satisfactory for a group of builders and has not been able to bring them back to the housing market.

Where are the most expensive lands?

In this report, the most expensive lands in Tehran are also mentioned. The average price of land and housing in different neighborhoods of Tehran, especially in two areas 4 and 5, whose price levels have always had a certain distance from the average price in all transactions, as well as in some northern and southern areas of Tehran, shows that the ratio of land price to Housing in these areas has reached 1.7. Estimates indicate that even in some areas, the ratio of land price to housing has reached two units, and in other words, the average price of land in these areas has increased to twice the price of housing. Of course, these estimates are based on the suggested prices in the existing files of the housing market, and reliable data on definitive prices is not available.

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