The probability of housing prices doubling in 1402 | Why did housing prices become expensive?
A steel industry activist believes that due to the increasing volatility of iron prices in late 1401, housing prices will probably double at least in 1402, unless changes are made and the currency market is controlled.
Massoud Zulfaqari, an activist in the steel industry, said that about 60 to 65% of the total cost of the steel industry is related to iron, and said: Iron price changes will play a significant role in determining the final price of housing.
Pointing out that most of the projects in the field of steel structure work are related to the quality sector, he said: the price and the method of paying its costs are known, as a result, the contracts that are closed are contracts that do not allow any violation. Any delay may result in a fine equal to ten percent of the total amount of the contract.
Zulfaqari continued: According to the fluctuations that occurred in the price of iron at the end of 1401, when the price of iron was low, 25-30% of the advance payment received was enough for our work, but currently, even though 65% of We receive the contract amount only for the purchase of iron as advance payment, this amount is not sufficient for our work. Because when a contract is signed, it takes a month to 45 days until it is implemented. In this period of time, according to the fluctuations that exist, the price of iron that is estimated and announced may change, resulting in losses.
This steel industry activist further added: Another problem is that when the dollar is stable or declines, the cost remains high. Because the duration of changes in Iran is very short. For example, two days the price falls and after three days it rises and returns to the initial price.
He said: Because our activities are in the field of infrastructure related to housing and industries, if we want to make any change in the price of materials, it will have a multiple effect on the housing market. Part of the recent inflation also showed that the increase in the price of materials and wages caused a significant increase in housing prices. Therefore, this excessive price increase causes both stagnation and inflation, which is called a cancerous economy.
Regarding the impact of iron and steel prices on housing in 1402, Zulfaqari said: Although the housing price is very high, it has been kept stable for the time being, due to the increase in prices, in the middle of 1401, when wages plus iron and materials between It was 37 to 40 thousand tomans, but currently the contract we are concluding is about 70 thousand tomans, which means that the price has increased by 70 to 80 percent, and this is not the answer to our work. Although this condition is not specific to iron and the like, cement and materials related to housing construction also have an effect. With these conditions, housing prices will probably double at least in 1402, unless changes are made and the currency market is controlled.
According to this industrial activist, considering that the exchange rate is very influential in our economy, if there is a decrease in it, it will be temporary and the rent in the market does not allow its stability.
This steel industry activist stated in relation to the opening solutions in the steel market and consequently housing in 1402: The steel industry is entirely within the scope of Khusolti sector and the companies that have turned to steel production and are present in the market belong to the government. The government also takes advantage of these conditions and compensates part of its expenses and income in this way. We will have this problem as long as this flow is the responsibility of the government.
He continued: This issue will be resolved when the private sector enters the market in the real sense and there is competition. Real competition also happens when there are imports and they can easily import or export products and provide currency, not like the car industry where there is no competition and car prices increase day by day.