New statistical message to housing applicants/buy housing or not?

According to Tejarat News, production circulation Housing In Tehran, during the first season of this year, it has reached the lowest level in the last 18 years. Statistics that are not pleasant for buyers or sellers. but why?

The new statistics of issued building permits show that between 80,000 and 100,000 residential units were built in Tehran every year. This number has been decreasing since 2014 and reached 60,000 residential units and 40,000 residential units last year. But this number dropped significantly in the first quarter of this year and reached 6,000 units.

This trend shows that since 2014, the number of issued permits for residential units has decreased and the price per square meter of houses in Tehran has increased.

30 years of salary to buy a house

According to the central bank report Price per meter of residential unit In Tehran, it is 39 million and 400 thousand tomans. With this account, the cost of buying a 50-meter apartment in the middle area of ​​Tehran is two billion tomans; equivalent to 30 years of the minimum salary of a worker.

Even Mortgage It is not enough to buy a house and people cannot buy a house with the help of a mortgage. All these factors work hand in hand to reduce the demand for newly built housing and leave new and newly built units in the hands of builders.

This problem causes the builders to not be able to sell their new units and get the necessary capital to build their new units. The result of this problem is the reduction of construction and, in other words, the reduction of housing supply. The lack of supply fuels the price increase and people’s ability to buy housing decreases again, and this lack of demand keeps builders away from entering the market.

The result of such a problem is creating a vicious cycle that increases further House price and further decrease in the number of residential units.

The message of such statistics is not very pleasant for the housing market and it shows that with the stagnation of construction and the continuation of this trend, we should expect a further increase in housing prices.

A strange thing happened in the housing market

Of course, it cannot be said that housing transactions will be completely stopped in this situation. Because the statistics of real estate sales in the last one or two months showed that the real estate market has finally come out of the recession of several months and the number of real estate transactions has increased.

But the interesting thing to note about the housing market was that, unlike previous years, the largest number of transactions were related to old units built 20 years and above. This is despite the fact that in the past, the majority of housing transactions were related to newly built units. This statistic also shows that the price of newly built units in Tehran has increased so much that many buyers cannot afford it and therefore have turned to buying old units. Both those who intend to use and live in, and those who have bought a house for investment.

Is it time to buy a house or not?

The answer to this question depends on whether the applicant buys housing for personal consumption and residence or for investment.

Mehdi Suri, an expert on financial markets, answered this question in a conversation with TejaratNews not long ago and said: If people want to buy a house for personal residence and consumption, they should not hesitate at any time and should buy a house as soon as possible.

But if people’s intention to buy housing is to make an investment with the intention of making a profit, in such a situation the market is not conducive to entry and there is a possibility that the market will enter recession again. According to this expert, it is time to enter the housing market when a middle-class person can buy a residential unit with a bank loan and savings. In such a situation, it can be said that the market is out of recession and transactions are booming and investing in the housing market is profitable.