Behind the curtain of housing price increase – Tejaratnews
According to Tejarat News, in order to examine the root causes of housing price growth and even the boom in transactions in November, one should go back a little and examine other markets. One of the most important of these markets is the money market, which has recorded the wrong way of economic management, the unprecedented creation of liquidity and the increase in the speed of money circulation in the economy in recent months.
The changes in the money market have been so powerful that it alone can be the most important reason for the growth of the inflation rate and the decrease in the value of the national currency, and the result can now be seen in the turbulence of all markets.
But the activation of this powerful lever at a faster speed raised the alarm in the “currency market”; In such a way that since the beginning of November, the upward trend of the dollar price gained more momentum and was able to touch the border of the channel of 37 thousand tomans.
The domino of rising prices
The growth of the dollar rate always acts as the driving force of price growth in all markets; The upward trend of the American banknote, which the market maker has not been able to stop, gradually led to the growth of the inflationary outlook and price increases in all markets; The 44% inflation announced by the Statistics Center, which is of course a nominal inflation and does not represent the whole reality, confirms the same behavior of the markets. At the same time, the withdrawal of the western parties from the JCPOA negotiations also strengthened the increase in the price of the dollar and the growth of the inflation outlook, so that all markets, including gold, coins and housing, became hot.
These conditions have caused the growth of housing prices on a daily basis. TejaratNews’ field investigations indicate that many real estate transaction meetings have been canceled in November and the first half of this month due to the daily increase in housing prices. In other words, the supply side retreats from sales with the prospect of price growth. At the same time, the daily growth of prices has scared the real and effective market applicants from higher prices and property inflation and has dragged them into transactions. Accordingly, despite the increase in prices, the real estate market has seen an increase in the number of transactions, so that the price of each paper in 1400 has exceeded 105 thousand tomans and the price of papers has reached 110 thousand tomans in some months.
The spread of inflation to the building materials market
But the real estate market has received another blow from inflation, the result of which is evident not only in the growth of housing prices in November, but also in the continuation of price increases in the coming months. Since November, the price of construction materials has faced a significant growth and has experienced a new price shock every time.
Activists of the housing market say that the price growth of materials started at the beginning of autumn, but it intensified in November. The survey of Shamakh in November, which was recently published by the Iran Cooperative Chamber, confirms the same behavior in the construction materials market. According to the report of Shamakh Abanmah, builders and housing market activists have emphasized on the simultaneous inflation of the price of construction materials and the selling price of the built units.
It should be mentioned that the height of the whole building in November this year was 45.78; Although this number indicates the improvement of the building condition compared to October, it is still far from the number 50, which indicates entering the state of prosperity. At the same time, Shamakh Construction Materials reports significant inflation in November. According to this report, the price of raw materials has increased from 45.16 in October to 68.42 in November. In this regard, it should be noted that the increase of the index in the mentioned case means the price growth in this sector or inflation.
This report becomes more interesting if we know that the housing price has increased from 37.63 in October to 64.73 in November. In other words, it can be seen from these figures that the growth of the price of construction materials has had a significant effect on the growth of housing prices.
Margins and challenges of the construction materials market also announced such statistics and figures since the beginning of November. In particular, the special case of ceiling unolit is a clear example of these challenges; The flight of construction unilite price from 70 thousand tomans in October to 400 thousand tomans at the end of November and then its rarity is an important example of inflation in the building materials market.
The fact is that due to the daily growth of prices and the upward slope of inflation, housing developers do not know how much they should spend to build each residential unit! This uncertainty has caused many builders to stop working. An approach that will result in a lack of production and supply and ultimately the continuation of high housing prices.
Read more news and analysis on Tejaratnews housing page.