Did the housing market record peak prices? – Tejarat News
According to the report of Tejarat News, Ali Farnam said regarding the forecast of the housing market in 1402: In recent years, the housing market has become such that no one has predicted this sector and it has come out right.
He added: Of course, this happened not because of incompetence; everyone expected the wave of inflation and increase to come to an end, we have had 5 spikes and peaks in housing prices in the country, which lasted one or two years, while from 1997 to today We have seen 5 other couriers.
He explained: At the beginning of 1997, the average housing price was 6 million tomans, but today, the average price of each square meter residential unit in Tehran has exceeded 60 million tomans, which means a 10-fold increase in 5 years.
The expert of the Majlis Research Center reminded that in the past, after every price peak, housing production immediately increased, and added: Although the price increase had many negative consequences, it also had positive effects.
Farnam said: For example, we have an index called QB, based on which the economic value of construction is determined. Based on this land price index, construction costs, sales price and profit are determined.
He pointed out that housing production did not increase between 1997 and 1402 and pointed to an example and said: In the first half of 1401, about 188 thousand construction permits were issued in urban areas, and our estimate is that last year, a maximum of 500 thousand permits were issued. be issued We do not know the number of rural areas, which is probably 40 to 50 thousand units. Our estimate is that in 1401, a maximum of 500 thousand construction permits were issued.
He stated: The second indicator is the information related to the completion of the building, which is at the disposal of the Central Bank. Completion is important because the applicant can live in it, the building permit can also create hope in the perspective of the next 2 to 3 years, that the production and supply of housing in the market will increase and the inflammation of this sector will decrease, for these reasons, the forecast The housing market is really tough.
In response to this issue, the expert of the Research Center of the Islamic Council said that it seems that the housing market has failed and the producers are not very interested in construction due to the disappointment in the sale of the built units. returns At present, consumer demand is almost out of the market.
Farnam explained: From 1985 to 1995, according to the census statistics, one of every four houses built has been inhabited by the owner, this is an interpretation of consumer demand, which of course is being collected. Today we had more accurate statistics.
He continued: The second reason for the disappointment of housing developers is speculative markets. Producers say, “I, the manufacturer, why should I put the built residential unit on the market today?”, a producer has a residential unit and his market perspective says that the price will increase by 30% in 6 months and by the end of the year by 60%, so why? put this unit on the market today.
He added: the builder is involved in the housing construction process for 2 to 3 years; One year is actually spent on issuing the license. On the other hand, he gets involved with the risks of increasing the price of construction materials, wages, etc., he says to himself, “Instead of production, I will convert my money into coins and currency, or anything else that gives a profit equivalent to the housing market, but in the short term.”
By stating that the competitive housing market has overcome the common profit motive of housing construction by increasing its price, he clarified: There is also a risk that; Despite imposing price increase on the builder and 2-3 year capital sleep, how many customers have cash on the day when the residential unit is completed and put on the market?
80% of housing developers are worried about sales
The expert of the Majles Research Center reminded that Tehran housing is an attractive market and said that despite the increase in prices, the demand is still there. In fact, there are people who enter it with the intention of investing and trading. Their goal is only that 6 months to have that residential unit for one year and then sell it, while in other parts of the country 70 to 80 percent of builders are worried about sales, in small and medium cities there is this concern that “if I, the builder I will build the residential unit, who will buy it from us at a fixed price and a reasonable profit?”
Referring to the fact that in the megacities, especially Tehran, the property has not been left in the hands of the developer in recent years, Farnam clarified: by the way, it is the sales and supply side that has held back in order to make more profit from the sale.
The strange desire of builders for some areas of Tehran
He said: Tehran’s housing market has a very strange problem; Where we have consumer demand, such as the southern regions, construction is very low, and the willingness of builders to produce housing in these areas is low, but in areas where housing is 150 to 200 million tomans per meter, which is an astronomical number, builders are struggling to build housing. To buy the land for 300 to 400 million tomans per square meter, that is, unbelievable figures, and build it.
He emphasized: This is one of the issues that needs regulation, for this, in addition to the help of the municipalities, we must use other tools to push the builders to these areas where there is consumer demand.
Source: Tasnim