Banks adjusted the housing price mechanism – Tejaratnews
According to Tejarat News, an economist said: Normally, when the price of the dollar rises, the price of housing decreases because its value is based on the domestic currency. But in Tehran, some banks and economic institutions that have invested in real estate raise the price of apartments with formal transactions.
In an interview with ISNA, Kamal Athari stated: These institutions set astronomical rates of 300 million tomans per square meter for their newly built properties in the north of Tehran. While the average price of the same metro area is 111 million and the average of Tehran is 55 million tomans. Price fluctuations in the housing market originate from macroeconomic issues. Therefore, within the housing sector, it is not possible to provide a solution to the problem; Urban management has turned to urbanization of capital by changing laws and selling density, which is the creation of rent.
Some banks have invested 80% of their capital in the housing sector
He added: “The housing market in Iran is suffering from the Dutch disease with fake transactions and this unproductive sector is constantly growing.” Some financial institutions and banks have allocated 50% of their capital to real estate. One of the banks has invested 80% of its capital in the real estate sector. These artificially raise the price of housing; While consumption and real transactions are down.
This economist and development researcher stated that some institutions and banks create pseudo-money through formal transactions and increasing the price of their properties and said: In this way, liquidity increases with pseudo-money and leads to price growth in parallel markets. Structural reforms should be made in the housing sector in the formulation of the seventh development plan.
Athari stressed: Maybe the housing market could be controlled in some way before we get into the current situation. For example, in the fourth development plan, we were implementing the comprehensive housing plan. But the policies were based on the premise that the housing sector is the engine of development; While today, the globalization of knowledge is the engine of development.
Stating that free zones have become a place for property transactions and car imports, this economic expert said: instead of attracting capital and conducting research and development, some free zones have turned to buying and selling real estate and distributing rents. Part of the educated labor force can work in free zones, but these zones do not create a platform for their employment.
Housing prices should have come down, but the banks didn’t!
In proving the claim of fake real estate transactions by some agencies, he said: Look at the relationship between the dollar and the real estate price. In a conventional economy, when the price of the dollar increases, the price of housing decreases because its value is based on the domestic currency. But with fake deals, they raise the price of housing. They set astronomical rates of 300 million tomans per square meter for their newly built properties in the north of Tehran; While the average price of one meter in the region is 111 million tomans and the average price of one meter in Tehran is 55 million tomans.
This economist and development researcher emphasized: Individuals and institutions that have invested in real estate in the north and west of Tehran stopped the tax on empty houses and we saw that this plan did not go anywhere. Of course, they will also face the challenge of taxing luxury houses.
According to Athari, about 60% of transactions are done in residential units with a construction age of more than 10 years. So, the question is why the housing price increases in newly built houses, when the real applicant does not have the purchasing power? Consumers who are not present in the housing market, but we see that the prices are going up nominally and nominally.
Source: ISNA