The Impact of Negotiations on the Housing Market / Real Estate Market Prediction
Negotiations to revive Burjam, known as the Vienna Summit, stalled in the final months of the Twelfth Government, according to Trade News.
Now, about five months after the inauguration of the government of Seyed Ibrahim Raisi, negotiations are set to resume.
Some financial market experts recently on Instagram Live Trade News They have expressed their forecasts for housing prices in various scenarios and their price trends in the coming months.
You can read some of them below.
Abbasian: Housing will not be affected by the negotiations
Barjam negotiations affect all pillars of our economy, but some experts believe that even negotiations can not make housing cheaper.
Ali Abbasian, a financial markets expert on the housing market, said: “Other issues besides negotiation affect the housing market.” One of the most important issues is the construction of 4 million houses. First of all, we must say that we do not have the raw materials to implement this plan, and if we do, this plan will cause a lot of inflation.
He added: “We have never seen a drop in housing prices, and in the worst case, the housing market is in recession.”
Karimishad: The housing market could stagnate
Saman Karimishad, another financial markets expert, also said: “I think if an agreement is reached between Iran and the United States, the housing market may be in recession.”
He added: “I do not see a decrease in housing prices at all.”
Tabatabai: Getting out of the recession requires a drop in prices
Ali Tabatabai, a financial markets expert, also said that housing is usually higher than its intrinsic value.
He added: “If there is an economic opening, the exit of housing from the recession will require a reduction of about 20 to 25 percent in the official price.” Today, 60 to 70% of ongoing transactions are concluded with the same amount of discount.
“If land prices fall, there will be a sharp drop in housing prices,” he said.
According to Tabatabai, if the government implements the housing leap plan properly, the value of land will go to the outskirts of cities and the price of land in the center and north of each city will decrease.
“At best, the housing market will be in recession for the next four years, and prices are unlikely to rise,” he said.
Lawyer: The government’s plan does not make housing cheaper
Borzoo Haghshenas, another financial markets expert, said: “Consumer position and demand in the housing market have weakened a lot, but the government’s policy in the housing leap plan is wrong and will not help solve this challenge.”
He stressed: the government has no duty to provide housing and in order for people to become homeowners, it must increase their income.
Haghshenas said Mehr housing was catastrophic for Iran’s economy and has not yet been completed. Now the same plan is going to be repeated again, which is problematic for banks and also causes inflation.
The possibility of creating an inflation wave
The financial markets expert stressed that the housing leap plan not only has no effect on reducing housing prices, but also creates an inflation wave in the country.
He said: “As long as housing in Iran is a capital good and not a consumer, prices will not fall, but given that this sector, in the current recession of markets, has suffered less price damage, probably its return in the next cycle of inflation to the level of others.” Markets do not reach.
Mousavi: The housing project will increase construction costs
Also, Omid Mousavi, a financial markets expert, said: “In the housing leap plan, projects such as Mehr Housing will probably be built on the outskirts of cities and as a result will not reduce housing inside the city.”
He added: “This plan will even raise the price of materials and may increase the cost of housing construction.” In other words, the projects of this project are not a competitor for housing in the city; They are mostly consumer and urban real estate is capital. But the government’s plan could also increase the cost of the second half.
The housing market expert said housing should not be done from the pockets of the government and banks. The public sector should legislate to hand over projects to contractors to cover construction costs by pre-selling units to the public; But with long-term installments.
Mohebbi: The housing market is on the rise
Maryam Mohebbi, a financial markets expert, said: “Housing prices are affected by various factors, including 60% of the prices of materials, 30% of land and 10% of other costs such as permits.”
He added: the price of materials is increasing; Because their prices are rising worldwide, but the value of Iran’s national currency is declining. As a result, I do not expect a downward trend in housing prices.
Referring to the government’s promise to build one million housing units a year, Mohebbi said: “Even if the housing market reacts positively to this promise and we see a decrease in prices, people can compensate for this downward trend by renting housing.”
He described the housing market as safe and said: “This market has a good return. Nor can the government intervene much in it and carry out price suppression.
According to Mohebbi, the housing market can still be attractive even if the recession continues or prices fall.
Mirzaei: The housing market has little room for growth
But Nima Mirzaei, another financial market expert on the housing market, said: “One can not imagine more growth than inflation for this market.” Some issues, such as the decision to build four million homes, psychologically control the market. It is likely to grow less than inflation in the medium term.
Referring to the price bubble in the housing market, he added: “This market has found a serious competitor, which is buying property in Turkey and Cyprus.” If housing prices rise further, investing in other countries will become more attractive. Although I personally do not approve of this move, the rival market is growing in terms of benefits such as citizenship.
Mirzaei said: “Nevertheless, the property market is stable and suitable for the long term.” Especially for those who are looking for a bank deposit, for example.
Diba: Housing is not cheap
Also in the housing market, Mojtaba Diba, a financial market expert, said: “In the housing market, the government’s plan to build one million housing units contradicts the claim of controlling inflation, and in practice, a much smaller number of properties will probably be built.” However, this plan sends signals to the market.
He added: “Housing is one of the safest markets for investment and there is likely to be no sharp decline in this market.” Stability in this market is more likely until 1402 and 1403. Over the past few months, trading has grown somewhat, but the continuation of the recession is not unexpected.
Diba said that during the recession, the builder may offer a slight reduction in the price of housing, but is not willing to receive, for example, half the price. Nevertheless, the best time to shop is during a recession.
Sadeghi: A sharp fall in prices is unlikely
Milad Sadeghi, an economist, also explained about the future forecast of the housing market: In the housing market, there is no trading recession, but the price recession will continue until about 1403. At that time there is a possibility of a significant price increase. Prices in Tehran may even reach 55 to 60 million tomans per square meter.
He added: “The possibility of a sharp fall in this market is very low because the housing market in Iran is not credit and homogeneous and housing is a valuable asset that people are not willing to apply high price discounts.”
Sadeghi said: “This market has powerful players such as banks, foundations and institutions that do not allow a fall of, for example, 30 or 40 percent.”
Awareness: The housing leap plan is not expert
But Nima Agahi, a financial market expert, said of the government’s plan to build four million housing units in the market: “Governments in the first year of their work, usually with the aim of attracting public opinion and in fact with political goals, come up with plans; The government’s housing plan is similar, and not very expert.
Pointing out that this plan has many ambiguities, he said: “One of the ambiguous issues is whether this plan is defined according to the real price of materials in the market or the mechanism of preferential and imposed prices?”
Agahi added: “Considering the performance of the government so far and the policy of mandatory pricing, it seems that the second mechanism should be used, because only in this case it is possible to finance the housing project and achieve its goals.”
Emphasizing that the housing plan of the main government has heavy inflationary effects, he said: “This plan, due to the high volume of construction, disrupts the order of related markets, especially steel and cement, and price increases are an inevitable part.” Finally, the government does not accept responsibility for this price increase.
In response to a question about the future of the housing market, Agahi said: “This plan will not significantly reduce property prices.” Perhaps, in the most optimistic case, only a 10% reduction in prices may occur.
According to him, during the same period, challenges such as rising inflation and rising currency prices will occur, which will neutralize the effect of this plan.
Heshmati: The government’s plan is not practical
Mohammad Heshmati, another financial market expert, also believes that governments in Iran usually turn to the housing market during a recession and move to increase bank interest rates to escape inflation. These ways are handy and the 13th government should not take them.
He added: the price of housing consists of three parts: land, materials and the cost of the construction license. In the housing leap plan, the government provides the land for free and is probably not too strict for the license. The main issue in this plan is the payment of materials.
Heshmati, referring to the government’s request to build units at a cost of two million and 750 thousand per square meter, said: “It is not possible to build housing at the costs that the government has predicted.”
He said: “At first glance, the payment of facilities in this plan is very good and people pay the bank installment instead of paying the rent; Eventually they become homeowners, but paying for these facilities on an annual basis of one million units requires a very high number.
Heshmati added that in order to provide the necessary resources, the government may have to divert facilities from the industrial sector to housing, which is causing the industry to stagnate. The second solution is to borrow from the central bank, which increases liquidity.
“Both solutions will ultimately lead to long-term inflation, while the housing boom plan has little effect on lowering prices in the market because people who now own housing are reluctant to sell their assets for half the price, for example,” he said. This plan may only prevent price increases.
Samavati: The housing market is not attractive until next year
Mehdi Samavati, a financial market expert, believes in predicting the future of the housing market: In housing and land, there is no investment attractiveness for the next year.
He added: “This does not mean a reduction in prices in the residential property sector, because people do not offer housing at a severe discount and take advantage of the rental market.” But commercial real estate is in recession with prices likely to fall.
“Whenever governments want to intervene widely in the market, they have to avoid it,” Samawati said. The Housing Leap Plan is such an intervention; It also has an empty pocket. This plan is not even comparable to Mehr Housing; Because at that time the price of oil was more than $ 100.
Sadeghin: The housing market is rising from 1403
“The housing market is in recession for at least the next two and a half to three years,” said Ali Sadeghin, a financial markets expert. In 1401, I recommend pre-purchasing small units or building housing with a delivery time of 1403. Investing in the housing market should be done with the vision of 1403 onwards.
He added: “Housing has not improved by more than 10 to 15 percent at the height of the recession and we should not expect a significant reduction in prices.”
It is recommended to study the report on the beginning of the Iran nuclear talks in Vienna.
Read the latest housing news on the Tejarat News Housing Market page.