The impact of the emotional drop in the price of the dollar on the housing market / is inflation coming? – Tejarat News

According to Tejarat News, the dollar has been the main driver of financial and capital markets since 1401 and has gone through many ups and downs. This foreign currency has passed its historical peak several times and in a short period of time, it has returned to some extent with the temporary and control policies of the government.

Of course, in the end, it became clear that the force of sanctions and price increases prevailed over the control policies of the Central Bank, and now the price of the dollar is at the end of the channel of 40 thousand tomans. But what are the consequences of these ups and downs for the capital markets, including housing?

Disruption in the housing sector with exchange rate fluctuations

Mansour Ghaibi, an expert on the housing market, told Tejarat News: “The expansion and richness of the housing sector in developing countries is considered as one of the main elements of national production and, as a result, one of the factors of national economic growth.” In addition, we are in a developing country where, unfortunately, the fluctuating behavior of currency prices in all economic markets, including housing, disrupts the supply of consumer housing.

He continued: “That is, as long as we don’t want or can’t control the market and the economy, we will see the consequences of the increase or decrease in the price of the currency and the dollar in the housing economy.”

The effect of dollar suppression on the housing economy

Ghaibi also explained about the trend of the dollar price during the past year until now: “From the beginning of 1401 to the end of it, we saw a 125% increase in the price of the dollar in the economic community. In another definition of this increase, the value of our rial against this foreign currency has decreased by three times, and the 100% dependence of Iran’s economy on the dollar and foreign currencies has caused the inflammation and struggle in the economic society in order to maintain the value or fall of credit or sources of wealth from the people, and the inflammation has shown itself in all economic areas, including housing.

This housing market expert said about the policies of reducing the price of the dollar and its impact on the economy: “The next problem is of a different kind. The increase in the price of the dollar, which intensifies, is decided to return it to its original state in a short period of time. This price reduction also has many consequences in the society and causes inflation stagnation and accumulation of demand in consumer markets. This factor creates a reason for prices to rise falsely and emotionally in response to this accumulation of demand.

Price stickiness in the housing market

This housing market expert continued: “In a concrete way, we can judge that we passed the year 1401 with a 125% increase in the dollar, and we passed the year 1402 with a decrease of about 25%. It means that there has been a 150% fluctuation in the dollar price in the society, which itself causes concern and inflammation or inflationary stagnation in the housing market.

He added: “It means that no emotional behavior will help the housing economy in a decreasing way. The price stickiness in this area is quite high, with the relative decrease of the dollar, it will not leave any results for the housing except stagnation and the continuation of the inflationary stagnation.

Inflation stagnation is an issue that experts predict with different approaches for the future of the housing market in the next few months; A situation where prices tend to rise without trading in the market.

If the government does not implement the right policy in this area, regardless of the previous show policies, the wave of rising prices will again affect the housing market from around this fall.