Finding the roots of the housing crisis in Iran / The fall in real income made the house out of reach!

According to Tejarat News, the housing market has experienced an upward trend in the past few years under the influence of various factors in the macroeconomics. On the other hand, people’s purchasing power has decreased to a great extent, and as a result of the complicity of these factors, buying minimal shelter for households is becoming more difficult every day.

With this process, the danger alarm of the reduction of housing quality and people turning to informal houses and marginal settlements has been sounded, and experts believe that it is not far from the imagination that in the near future, more people will turn to Kapar.

Factors aggravating the recession in the housing market

Mahmoud Olad, an expert on the housing market, told Tejarat News about the state of this market: the conditions for the supply of new buildings have been stopped for several years and there is a stagnation in construction; Practically, the number of newly built units has decreased drastically.

He continued: On the other hand, there is a high accumulated need for residential units, but because people’s purchasing power has decreased and they have become poorer, this need has not and will not become a demand. In this situation, there is no demand for new units, and as a result, it increases the recession.

The prevalence of informal settlements

This housing market expert stated regarding the expansion of informal settlements as a result of the decline in people’s purchasing power: housing is a necessary commodity for people and they must provide it in any situation; This has made us expect the expansion of informal housing. Since people do not have the power to buy newly built residential units, they are gradually drawn to use markets that are more informal, such as marginalization.

He continued: The fact that the quality of demand in the field of housing is decreasing has caused the demand to move towards smaller housing in the last one to two years, which is also disappearing, and people cannot afford much smaller units. This issue finally reaches the rental market; Now the demand for rent has increased and its price has also increased significantly.

The main root of the housing market problem

Olad said about the main problem of the housing market: This situation is not caused by the expensiveness of the housing unit alone! It is true that the price of housing has increased, but it has not increased much differently than the general inflation, and the main factor is the drop in people’s real income and their continuous impoverishment, which was caused by a decade of negative economic growth. About 50% of real per capita income has decreased and people have become poorer.

Housing market outlook

This housing market expert said about his prediction of this market: as long as the process of impoverishment of people continues, real per capita income will not increase and people’s purchasing power will not grow; In this way, the housing crisis continues. If the prices had increased like in the 70s, but we also had income growth, people would not have been pressured to such an extent.

He continued: As long as this process does not return to its previous state, unfortunately, the situation of the housing market will worsen in terms of consumption indicators, the quality of housing will decrease, and it must be said that the price increase due to cost pressure and lack of production will continue the recession.

Despite the new policies of the government in the field of housing, experts still predict an increase in the future of housing prices. Although no new statistics have been published on housing market developments in Tehran since January 1401, field observations indicate the continued increase in prices in this market. Currently, the average price per meter of a residential unit can be considered up to 60 million Tomans.

This is despite the fact that, despite the inflation, people’s financial ability and table are decreasing every day. As it was said, housing does not need to be ignored by people or postponed to another time; Therefore, with the continuation of this trend, we will witness the emergence of disasters in the field of people’s residence, especially in a metropolis like Tehran.