Housing price forecast until the end of this year – Tejaratnews

According to Tejarat News, in the first six months of this year, the housing market was in complete recession. According to the latest report published by the Iranian Statistics Center, the number of housing transactions in September was only 3,000 units, which indicates a deep recession in the market.

In a report, the economic world has answered the question whether the housing market will come out of this recession or not.

The efficiency of the housing market in the first six months of this year

The yield of financial and capital markets was very low in the first half of this year, and some markets even recorded negative yields. But in the meantime, housing yield was higher than all other markets. The return on investment in the stock market between the beginning and the middle of 1402 was 8% and the return on the dollar was 3%. In the coin market, “yield became negative” so that the price of coins decreased by 10% in September compared to the beginning of the year. Housing efficiency recorded a rate of 15.5%.

But what happened that housing recorded the highest return? At any time, the economic and political conditions of the country become such that “investors find a situation similar to purgatory in the sense that they do not imagine the future conditions in a reassuring, positive or negative way”, in this case, investing in markets Like dollars or coins, it becomes “very risky” while “from the point of view of these people, housing is not risky and in the long run, this market will finally face an increase in value”. The same perception of people in recent months has made “Maskan Dar Effisi” take the first place.

Will housing prices grow in line with the dollar?

Last year, exchange rate fluctuations had a high impact on housing prices, and any growth in the currency market immediately had an increasing effect on the housing market. But will housing grow in line with the dollar this year?

According to the prediction of some economists monitoring the housing sector, even if in the coming months, under unlikely circumstances, the dollar rate will be similar to the years before 1402 and will once again be on a steep upward path, it will be very unlikely that housing inflation will follow dollar inflation. In other words, due to the lack of housing purchasing power at the current price level, the possible increase of the “offered price” in the conditions of the rapid growth of the dollar rate, will not lead to “buying an apartment at a much higher price than in the first half of this year”.

In this case, if the dollar rate is in the condition of a sharp rise, the weak scenario will be “more severe recession of housing purchase transactions along with low price growth”. If the dollar rate experiences a relative stability like in the first half of this year – which the forecasts are mostly of this kind – then the likely scenario will be “close distance between housing inflation and general inflation”.

Housing market forecast until the end of the year

The road ahead of the housing market, especially in the short term – until the end of this year – is mainly affected by “lack of purchasing power” and “high finished price”. Surveys show that since 2017, the price of land in Tehran has increased 26 times, while the price of housing has increased 18 times. The total price of housing production consists of the sum of “construction cost” and “land price”, of course, with different weights.

Currently, according to the calculations of the builders in some areas of the capital, the share of “construction cost” of the total price is 29%, and the rest is the share of the land. Builders are stuck in the trap of “land inflation” and “lack of purchasing power”. Both they have to bear the “severe growth of land prices” and they are not able to “fully reflect production inflation on sales inflation”. This paradox has fueled both the “intensification of the construction stagnation” and the “path of the fundamental reduction of housing prices”. From the point of view of the builders in the housing market, any kind of price reduction above one level will affect their “construction investment income” and cause the builder’s profit margin to decrease. In this intellectual framework, “housing price reduction” should happen through “finished price reduction”; It means a drop in land prices.

If the issue of the agreement and JCPOA is fully resolved, this means “the complete end of economic uncertainty for the future” and as a result, the owners of Kalangi buildings will be encouraged to They will “bring their property into the demolition and participation market” and this will reduce the price of land. From this point of view, during the months leading to the end of 1402, the construction market will probably not see a noticeable increase in the supply of Kalangi property, and therefore, the construction recession will continue. But this doesn’t mean “apartment price resistance is on the way down” but the low volume of apartment sale transactions will likely be done at lower prices than in the first half of the year, unless something happens against the direction of the first half of the year in “dollar equations and foreign policy situation”. occur at the beginning of the year.