Housing; Unattainable dream! – Tejarat News
According to Tejarat News, Iranians have been among the economic deciles for the past few years, inflation and high prices have been the main issues they have struggled with.
These two issues have caused people to either ignore buying many of their needs or buy them in lower quality versions.
In the meantime, housing, as a shelter for living, is not a commodity that can be given up; Therefore, many people are forced to buy lower quality houses. Houses that are older and located in neighborhoods that are far from their workplaces and schools.
This is one of the reasons that has greatly reduced the demand for newly built apartments. On the other hand, the drop in profit from mass production and construction has also caused mass builders to show less desire to build, and many of them have decided to change their jobs. Some experts believe that the profit from mass production for the activists of this sector has dropped by 28%.
Currently, with this trend of decreasing demand and willingness to carry out residential projects and the drop in construction statistics, there has been a severe recession in this sector and the housing market in general, which has made supply and demand difficult.
A significant decrease in the issuance of building permits in Tehran
According to the data of the Iranian Statistics Center, just five years ago, that is, in the spring of 2016, about two million and 705 thousand building permits were issued by Tehran Municipality for the construction of apartments in this metropolis.
It should be noted that 2016 was one of the few years after the revolution when inflation was in single digits. Decreasing inflation became a factor for builders to enter the housing market. Therefore, in the spring of 2017, the number of issued licenses increased by 30.7% and reached about three million and 837 thousand.
In May of this year, Donald Trump, the president of the United States at the time, called the signing of the JCPOA invalid, and after that, inflation and prices went up.
Under the influence of these conditions, the number of building permits in Tehran, in the spring of 2018, faced a decrease of almost 100% and decreased to 2,204.
Since then, until the spring of this year, the number of building permits has been reduced to 739, and compared to the spring of 2016, it has gone through a 100% decrease.
A review of Central Bank statistics, which is published every month on the average housing price in Tehran, shows that the recession in construction has had a direct impact on the housing market.
As far as the 100% decrease in the number of construction permits in 2017 compared to the previous year, it has resulted in an increase of 8.106% in the average housing price. This statistic is the largest price increase that the housing market has experienced in at least the last five years.
Housing market outlook
According to the announcement of the Iranian Statistics Center, inflation in January has increased in accordance with the trend of the past few years and has reached 3.51 percent. This indicates that construction materials may see an increase in price again.
On the other hand, disorder in parallel markets has caused investors to migrate to the housing market and has increased speculative demand in this field.
Also, the increase in inflationary expectations has caused the owners to raise the prices of their units, and since there is no proper monitoring of prices in the housing market, housing prices will falsely increase.
Therefore, housing is facing problems both on the supply side and on the demand side, and a large section of the society sees the purchase of housing as an unattainable dream.
If the inflation and the expectations caused by it are still on an increasing path, the stagnation and the average prices will be in a critical situation next year.
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