Consequences of housing market stagnation / Why is the real estate market asleep? – Tejarat News

According to Tejarat News, the housing market and all its related areas entered the year 1402 while experiencing an unprecedented price increase in the past years. Also, the twists and turns of the real estate market, especially since 1997, had caused a large number of activists to give up the gift of making a profit and buy property and leave this market.

However, according to real estate consultants, until the end of 1401, the buying and selling of housing was more or less done, and the reports of the Iranian Statistics Center also indicate that although the constructions were not comparable with the previous decades, but each month experienced a relative increase. has done; A trend that turned its page this year.

Material inflation and housing stagnation

Official data and field observations indicate that in the first half of 1402, recession was the main actor in the housing sector. Some real estate consultants say that transactions have been locked for months and there are fewer transactions in the market.

The high price and inflation of construction materials following the growth of general inflation was the first blow that hit the construction industry in Iran. This situation occurred while the increase in the price of land and houses practically made the purchase of new housing (especially) a dream for a large segment of people, and their purchasing power dropped sharply.

After that, the increase in workers’ wages and the upward trend in the price of construction permits were also added to the previous factors and finally reduced the profit margin of the mass builders of the private sector to a significant extent and thus destroyed the desire for construction.

Therefore, even though the construction has had a relatively stagnant situation in the past years, but in 1402 and in line with the government’s policies to reduce inflammation in the housing sector, it has been pushed back a few steps. But what are the overall effects of the recession in construction on the housing market?

Removal of housing from applicants

Fardin Yazdani, an expert in housing economics, told Tejarat News about the impact of the construction recession on the housing market: “The recession in the construction market means that housing construction has lost its attractiveness for investment!” If the volume of production goes down, first of all, the funds that are left half-finished will not reach the market.

He continued: “When the construction is not done, the supply will also suffer and the overall balance will be disturbed.” Also, the price gap between newly built and non-newly built properties will increase and eventually increase the prices. The price increase naturally reduces the access of households to housing.”

capital flight; The result of the recession in the housing market

This housing market expert also said about the effect of the construction recession and production factors: “If it is examined in more detail, the recession also affects the production factors. Construction has many back and front parts. For example, the volume of demand for the construction industry will decrease and it will cause problems for the industry.”

He continued: “The next point is that the job status of specialized forces and construction workers is also affected by this recession. “Especially, construction workers are considered to be one of the weakest groups in the country.”

Housing market forecast

Regarding his forecast for the second half of the year, Yazdani said: “I think nothing will happen in the trading market, but it seems that construction will grow a little until the end of the year. Of course, it does not mean that it will enter a period of prosperity, but due to the relative decrease in the price of construction materials, it may gain a little momentum.”

Although the current recession of the housing market has reduced its inflammation, experts believe that the impact of this calmness and stagnation on the body of the housing market was much greater than the high prices of the previous months. They also say that with the return of prosperity to the market, the prices may rise again and this time the inflationary stagnation will cast a shadow on the housing sector.

Reducing the construction of residential units in the spring of 1402

It should be noted that the report of the Iranian Statistics Center on the issuance of construction permits in the spring shows a superficial view of the construction situation in the country. According to the permits issued for the construction of buildings by Tehran Municipality during the spring of 1402, the construction of 9 thousand 586 residential units is predicted, which shows a decrease of 28.4% compared to last season. Also, the total area of ​​infrastructure in building permits has decreased by 29.1% in this period compared to last season.

In the spring of 1402, based on the permits issued for the construction of buildings by the country’s municipalities, it is predicted that the units built this season will experience a 22.7% decrease compared to the last season. The total infrastructure area in the permits issued for the construction of buildings in the spring of 1402 has decreased by 21.7% compared to the winter of last year.

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