How does the price of housing decrease? / Evaluation of government policies in the real estate market
According to Tejarat News, the critical situation of the housing market continues. People still do not have enough power to buy and rent housing, and on the other hand, construction is not profitable for builders due to the decrease in profit and the high cost of building materials. This factor itself will decrease the supply in the market and ultimately increase the prices.
Of course, this is despite the fact that in the past weeks there have been news about a 20% decrease in housing prices. Some experts agree with this statement and others consider it impossible to reduce housing prices in the current situation. But how is the situation on the floor of the market?
The housing market has not changed
Mohammad Mortazavi, the head of the National Association of Mass Builders of the country, told Tejarat News about the current state of the housing market: I don’t see much change in the current housing conditions. We are still in the previous situation because there will be no change when there is no hope of improvement in the housing price.
He added: “Either we should be able to keep the finished price constant, or reduce the construction price according to a series of incentives and works that the government and the private sector can pursue together in the form of joint action.”
Mortazavi continued: There has been no success in price control. It means that the cost price increases continuously and daily, and this is the result of inflation that prevails in the society. In this way, housing production is decreasing.
When will the housing market conditions improve?
Mortazavi said: “Once we can see serious effectiveness in the transaction market and the conditions of the housing market will improve, and we will come out of the recession in the form of a boom in transactions.” Achieving this goal is possible when housing production increases and people’s purchasing power increases.
The head of the National Association of Mass Builders of the country explained: When economic indicators indicate that there is no economic growth, it means the weakness of the demand side. The combination of these factors means that we do not see the conditions improving in the housing transaction market, nor do we expect an increase in housing production. All of what has been said does not promise better days in the housing sector.
The government’s futile solutions to improve the housing situation
He also said about the government’s current solutions to improve the housing situation: the solutions recommended by the government, which even the parliament approves, are aimed at interfering in the regulation of the market. That is, because we cannot be effective in housing production, we can directly enter into the market regulation.
He continued: For example, he intervenes in the relationship between the lessor and the lessee with mandatory orders. In recent days, a plan has been created to set prices in the field of housing. Headquarters should be formed in different cities and neighborhoods and these headquarters should set prices for housing.
Mortazavi explained about the impact of these measures: These cases are aimed at regulating the market, but none of them succeed because the main obstacle to the conditions in the real estate transaction market is two things. One is the lack of housing production and the other is the inability of the demand side; We have to direct the demand sector in different ways and increase people’s purchasing power.
He continued: But no action is taken in these two sectors, and these mandated interventions cause more dissatisfaction for applicants, sellers, and mass producers.
The need to define the perspective for the housing market
Mortazavi explained: Basically, directive interventions do not achieve success in the action scene, the seller goes his own way and the buyer does not pay much attention to these issues, in addition to the fact that brilliant results are not obtained and dissatisfaction in the society increases; Because it is instilled in the society that the government does not benefit from efficient plans and bills.
The head of the National Association of Mass Builders of the country said about a solution to solve the problems of the housing market: once and for all, the issue of housing should be defined at the level of the landscape, and in all these issues, we should identify and support the effective factors and actors of this role with correct directions.
He continued: If these issues are looked at on a macro level, it can reduce the total price and even control the offer and sale price due to the significant supply in the housing market. If we are on this path, due to the existence of such a perspective, the market will improve.
Housing sector statistics should be published
He said about the prices: to know about the prices, you have to refer to the statistics. Statistics about this have been published for the past few months. The head of the national mass builders association of the country added: I believe that if the stabilization of the national currency continues for a few weeks, it can reduce housing prices, provided that it is continuous and creates hope in the society that it will reduce housing items and even wages in the construction sector. .
Mortazavi continued: Of course, I am not optimistic about wages, because even now the difference between wages and the reality of inflation is very high, but if the stabilization of the national currency leads to a decrease in the price of construction materials, it can at least stabilize the selling price. However, I believe that the government should allow statistics and statistical output to be used for any kind of prediction.
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