The housing market downturn has experienced a severe recession in the past few years due to direct and indirect factors in the financial markets. Many factors have led the pricing path in this area to an unprecedented stagflation. On the other hand, the growth of the exchange rate, the growth of construction costs and rising iron and steel prices and the removal of heavy liquidity from society due to the devaluation of the control We are that the housing market is very stagnant. In the following, we will point out the most important factors affecting housing prices. Please stay with Artan Press until the end.
*** Reduction of cement production; The growth and stagnation of the housing market
One of the most important factors that has strongly influenced the growth of construction projects this year has been the reduction of cement production due to power outages. The stagnation of the housing market, on the one hand, and the loss of construction projects, on the other hand, have left no clear prospects for the housing market. The increase in the price of cement, steel and rebar is considered as the main materials in the construction sector and has an effective role in the growth of housing prices.
It can be said with confidence that there is a supply and price problem in all the mentioned goods. To date, we have not seen any convergence in price growth in this way. The problem of cement production has not been raised since the beginning of this year. We have dealt with this problem for a while in the past years. However, the rate of reduction of cement companies’ production obligations has sharply decreased this year. This has increased the cost of housing and, consequently, the cost of production, and in a domino effect has led to a sharp rise in the housing market.
*** Decreased liquidity in the community and the housing market downturn
Another issue that has accompanied the housing market with a lack of price shock is the issue of declining liquidity in society. Due to the events that took place in the stock market and swallowed a large part of the society’s liquidity, the purchasing power of the people as a kind of current money in the country for heavy transactions such as real estate decreased sharply. This coincided with US sanctions and the rise of the dollar, causing more inflammation. Buying a home in a big city seems to be a big problem for many families.
*** Optimistic views on the future of the housing market
Some analysts believe that the housing market will get out of this situation. For example, a few days ago, one of the analytical news sites stated that the housing market downturn has always been aimed at creating economic and political stability, and accordingly, in the next government, we expect an increase in the volume of construction and a relative boom in transactions; Inflation of construction materials also has no effect on this sector, because it does not have a high share of the cost price.
But a number of fundamental factors have come into play that call into question the government’s ability to maneuver in housing production. For example, power outages in steel mills directly affect the production of steel, rebars and iron produced for construction. In a way, if the next government is serious about housing production and improving the status quo, many factors beyond the government’s control can work in this direction. Therefore, it seems that the new government will face a great challenge in the housing debate, especially since a great election promise has been made in this regard.
*** Immature offer of housing supply in the stock market
Some authorities have suggested that housing be offered on the stock exchange to control the housing market downturn. This issue was also raised for the car. This thinking has major drawbacks. Housing market conditions are too complex to be solved with a simple formula. Due to the difference in the geographical area of each property, the average pricing process is not possible for it. The supply of housing in meters in the commodity exchange will not be fruitful. Every time the housing supply fever in the commodity exchange heats up, comments are made about its impact on the housing market, which should be noted that in no way will this plan have positive results in the housing market and will not be fruitful.
Because housing is not a homogeneous product that can be offered in terms of square meters, kilograms, etc. It is true that the average price of housing is determined, but the price of housing varies from point to point and floor to floor in different areas. Therefore, the average price of housing can not be invoked. Unless housing is offered in meters for a specific project that is unlikely to succeed.
*** Take a look at housing market inflation over the past 5 years
In July 1400, compared to 2016, the price of the dollar increased by 580% and the price of housing in Tehran by 580%, however, the Statistics Center announced the growth of the price index by 227%. In July 1400, compared to 2016, when housing prices increased nearly 7 times, the cost of housing and rent was announced by the Statistics Center by 2.4 times, and with a 7-fold increase in car and mobile phone prices, the Statistics Center increased the cost. 4.2 times for transportation and 1.8 times for communications. Of course, the data of the Statistics Center cannot be completely crushed. The issue is how to calculate.
But free analysis shows that the tour is far higher than what the statistics center shows. It should be noted that in the coming months, the growth rate of inflation will gradually decrease, which does not mean lower prices and means a slower growth rate.
*** The depth of the housing market downturn in terms of statistics and numbers
Enough of the stagnation of the housing market downturn in big cities that out of 399 neighborhoods of the capital in 250 neighborhoods, no housing deals have been made at all. Observations of the real estate market and real estate offices show that a significant number of real estate firms have been plunged into bankruptcy. In order to understand the peak of the disaster, it should be noted that not a single contract was signed in 60% of Tehran’s neighborhoods.
Unfortunately, in the current situation, the banks do not provide significant facilities for the construction and purchase of housing by the people. The Housing Bank has long removed youth mortgages from registration, and 18% loans are by no means attractive to applicants. The housing market recession in Tehran has reached its fourth year. This issue can be a wake-up call for the country’s civil engineering and urban development. The components of aging and urban beauty in the coming years should not be overlooked.
*** A sharp decline in people’s purchasing power in the field of housing
Unfortunately, people’s purchasing power does not match current housing prices in the market. Analysts’ assessments show that “first-time homeowners” in the country, with an average income of 99 and an average housing price that year, take 36 years to become homeowners. The appropriate distance based on the global norm is a maximum of 10 years. In Tehran, the situation of this index is much worse and the time interval between becoming a housewife has reached an unprecedented 65 years based on the income status of Tehran households.
Without exaggeration, the biggest challenge of the country today from a civil point of view is buying and providing housing. This issue encourages marginalization in big cities and causes overwork and reduces the quality of life of people and increases the risks of marginalization. It is very strange that the government has not made any operational plan in these four years to control the housing rate and get out of this historical recession. Nor can the new government make a difference in the short term.
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