The fall of the housing market / deepening recession with a continuous decrease in purchasing power – Tejaratnews
According to Tejarat News, the housing market has been following the dollar pattern since the beginning of this year; In such a way that at first it has faced a decrease and then a price stability. This process, however, has resulted in a stagnation of transactions for the housing market, which needs to experience capital circulation.
The field survey of transactions in the city of Tehran indicates a significant decrease in the purchase and sale of housing, even in some periods and in different areas of Tehran, the purchase and sale of housing has become zero, and consumers and investment applicants have fled from this market.
The flight of capital applicants from this market has occurred as a result of the lack of prospects for prosperity and development, but the withdrawal of consumer applicants is caused by another factor called the reduction of purchasing power. During the past months, inflation has been able to maintain itself at high levels, and rent and housing inflation has always been positive and increasing based on data from the Statistics Center. In this way, while housing prices have decreased and then stabilized, but due to high inflation, buying a house is still a distant dream for people!
Consumers and the challenge of purchasing power
Hojjatoleh Mirzaei, an expert in housing economics, believes that “decrease in purchasing power”, along with the stagnation imposed on the housing market and the price stability created as a result of the drop in the price of the dollar, is the main challenge of the housing market these days.
Of course, he has emphasized that this price reduction is observed from the observation of the suggested price levels in the real estate market of Tehran and other cities and does not have an official basis and until the official statistics regarding housing price changes from statistical authorities such as the Central Bank and the Center Since Iran’s statistics are not published, it is not possible to comment on its exact amount.
In this regard, Mirzaei said: On the other hand, due to the high replacement value in the housing market, some developments can be considered temporary and short-term. Under the influence of some external factors such as exchange rate fluctuations, housing prices undergo changes or ups and downs for a while, but in the end, the high replacement value in this market determines the long-term trend.
High replacement value and withdrawal of consumer demand from the market
Mirzaei pointed out: From another angle, the rate of housing price growth has been so high and significant in recent years that temporary and short-term reductions cannot have an effect on effectively improving the purchasing power of households to return to the ability to participate in the real estate transaction market.
This housing economics expert continued in an interview with the world of economics: For this reason, it is sometimes seen that prices decrease to some extent under the influence of some external variables, but due to the high replacement value, they will go up again.
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