The impact of the increase in the price of the dollar on the housing market / does the American bill charge the price of property?
According to Tejarat News, inflation-adjusted prices have plagued the housing market for a long time, and due to the decrease in people’s purchasing power, buying a house has become a priority for most households, especially since the second half of this year.
The dollar is mentioned as one of the biggest factors affecting housing prices. The increase in the price of the dollar has traditionally always raised the price of housing. In the meantime, housing prices generally have not decreased significantly due to what is called “price stickiness” in the downward trend of the dollar.
Now we have to see what consequences the increase in the price of the dollar in the past months will have on the housing market in the coming year!
Following the housing of the dollar
Hassan Mohtsham, a member of the board of directors of the Tehran Mass Builders Association, told Tejarat News: Considering the inflation and the creation of liquidity, naturally all goods, especially housing, will experience a price increase, but at the moment, due to the events in foreign policy. It has been reported that we are witnessing the strengthening of the national currency. In other words, in addition to the fact that it has been prevented from further falling against the dollar, it can be said that it is in a better condition than the previous week.
He continued: If the government and the economic team can take advantage of these opportunities, we may see that the price of the currency will decrease even more. If the price in the currency market continues to decline, the price of goods will also decline, and the housing market is no exception.
Consequences of high housing prices on society
Mohtsham also explained about the consequences of the high prices for the housing market: the consequences that the high prices have had for the housing market so far will show themselves in the society in the future. One of these cases is the relocation of a large number of people to lower neighborhoods in terms of facilities and quality. A population that is no longer able to continue living in its previous neighborhood due to excessive prices and lack of income; In fact, these migrations also have cultural dimensions.
He continued: This case shows itself more especially in families that have a child going to school and has many effects and consequences on them. Even families sometimes face problems.
Mohtsham said: Some people cannot even continue their normal work when their place of residence changes and they have to change jobs. This cultural change of the environment, change of job and change of place of children’s education has adverse effects and consequences that may be negative for the society even in the short term.
The member of the board of directors of the Tehran Mass Builders Association also said: The government should take action in the national movement plan and should also think about determining the economic conditions in such a way that people do not wander.
The withdrawal of investors from the field of construction
He said about the impact of inflation on construction: inflation has been effective as it has been until now, if it continues after this, the price of construction inputs will increase again and naturally, construction will decrease; Because until the economy is not stable, the housing sector cannot continue at a sufficient speed and some builders will leave this field.
Mohtsham continued: Unsustainability causes mass production, which does not have enough capital for construction and does not know at what price it should be procured from other channels, to face problems. One of these channels is the topic of pre-sale, which is in an uncertain situation with these pre-sale conditions.
A member of the board of directors of the Tehran Mass Builders Association also said about the lack of supply: these works make us face a lack of supply in the housing market. If the supply cannot meet the demand in the society, housing prices will increase.
The impact of the increase in the price of the dollar on the housing market
Mohtsham said about the effect of the increase in the currency price on the housing market: when the currency price rises, the price of small goods quickly aligns with the price of the dollar; Of course, this increase in the price of currency occurs as a result of the increase in money printing in the country. Since, in contrast to this increase in money supply, the number of goods does not increase, this issue itself increases the prices.
He continued about the impact of this factor on the housing market: but housing does not adjust its price quickly and daily with the dollar; The realtor waits for a while and adjusts himself to that price after the dollar stabilizes at a certain point.
A member of the board of directors of the Tehran Mass Builders Association explained in this regard: In fact, he did not adjust his housing to the dollar, which went up to the channel of 60 thousand tomans. So we should expect that if the price of the dollar decreases and experiences a significant price drop, the housing sector should adapt to it and decrease.
He continued: But if the dollar does not continue its downward trend and remains at this level, housing in the construction sector will not increase, but in the supply and demand sector, it can find a difference and jump in price.
Housing market forecast for next year
Mohtsham also said about the trend of the housing market in the future: these last few days of the year must pass to determine on what basis the currency price will stop. At the end of April, when the market is inactive for 15 days; It should be seen to what extent the government can keep the currency price and how the housing market will react to the economic conditions.
He said: Of course, with the 1402 budget that the government has closed, if the growth of liquidity continues, we will see an increase in prices in all sectors, including housing.
Housing is a smart market and, as mentioned, it does not adjust itself to the price of the currency during the emotional phases, and if it has increased at a rate, its price will take longer to decrease than the rest of the goods.
Now we have to wait and see, according to the existing inflationary expectations, this productive market will align itself with the rate of the dollar in the new year, which is only a few days away from its beginning, and to what extent despite the prospect of an increase in inflation in the 1402 budget. Will the size witness an increase in prices and a recession as a result?
Read the latest housing news on Tejaratnews housing news page.