Ibrahim Ra’isi entered the presidency with a big election slogan. In his first remarks, he stated that he understood the housing production concerns in the community. It has a plan for this challenge and is confident that this challenge can be managed by adjusting market rates and increasing production. This issue became an excuse to examine the do’s and don’ts of the housing boom in Iran in the light of the existing realities. In the following, we will focus on the operational areas of interest in the housing sector. Please be with Artan Press.
*** Iran’s worrying indicators regarding affordable housing
We begin the report with a worrying statistic. The housing situation in Iran seems to have become a major social challenge. In recent years, we have seen a steady rise in prices in the housing market. People’s purchasing power has reached its lowest level since the census. The leap in housing production seems to be a complex one. In the current situation, this issue requires multilateral cooperation between various government and governmental bodies.
The results of an official report examining the situation of the population suffering from housing poverty in the country show that the population deprived of “affordable housing” in Iran is about twice the world average. In these countries, the annual residential property tax is the backbone of housing taxes to stabilize prices. Supplying housing units with tax leverage and preventing price turmoil in the housing market is the result of unusual and emotional activity of non-consumption demand in the property market.
*** Banks are the key factor in the jump in housing production
In recent years, the banks in charge of housing construction have also adjusted their facilities for housing construction. In an interview, the CEO of the Housing Bank stated that the country’s banking system should revive the housing sector’s share of the facilities and, in accordance with the law, provide the ground for the construction of 1 million housing units per year.
It seems that with the help of housing producers such as banks, we can see a jump in housing production. In the form of the budget law of 1400, the parliament has obliged the entire banking system of the country to finance the construction of 1.2 million housing units in one year in the amount of 360 thousand billion Tomans in the form of housing construction facilities. He was confronted with ambiguities and problems on the part of the Guardian Council. We hope that the implementation of this law will lead to a boom in this propulsion industry and solve one of the concerns of the people.
*** The role of the steel market in the housing boom
One of the most important wheels connected to the housing plan and the big wheel of the country’s development area; The country’s steel market. The jump in housing production does not pass except through the adjustment of the steel market. That the plan be followed up by the parliament and approved by the Guardian Council; What effects will it have on the country’s steel market; Apparently, this is an issue that seems to me that I should pay more attention to later. The current steel prices in the country are key issues regarding the cost of these housing.
*** Unprecedented but optimistic downturn in summer housing deals
The housing rental market these days is facing a minimum number of companies. Intermediaries assess the summer market situation as exceptional and similar to the “winter” season. In fact, there are plenty of rental files on the market. But in practice the demand for rent is very small in the market. The result of this imbalance between supply and demand in the rental market should be a reduction in rents.
The issue has been confirmed by intermediaries. Some landlords have fallen behind by up to 20% of their initial bid price so they can rent their apartment before the end of the summer season. The market seems to be preparing for a housing boom. The housing market in the country has been experiencing rampant inflation for the past year and a half. Inflation that makes the dream of buying a home more unattainable every day. On the other hand, it brings with it a construction recession in the country.
*** Evaluation of housing sales plans in meters in the commodity exchange
In such a situation, the use of financial instruments of the Commodity Exchange can help the housing market. Schemes such as the sale of housing meters in the form of standard futures are very effective. It is very useful to set up a land and building fund and set up a real estate fund. The implementation of the housing sales plan in the form of standard futures bonds and the launch of the Land and Building Fund will increase the supply of housing and thus provide the basis for price balance in this market. At the same time, people’s micro-capitals are protected from the inflationary effects of the economy by attracting in this sector, and the value of these capitals is maintained in proportion to the growth of the inflation rate in the housing sector.
*** The need to pay attention to the jump in rural housing production
The method of setting up real estate funds, by raising micro-capital, also makes it possible for the real estate of government organizations to be transferred to the private sector. This will facilitate the leap in housing production. According to statistics published by the National Statistics Center of Iran, the annual inflation rate is 44.5% for urban households and 48.7% for rural households. Accordingly, it has increased by 0.8 percent for urban households and by 1.4 percent for rural households.
This shows that the inflation rate in rural households has grown more than urban households. Therefore, the path of housing production leap should not be sought only in metropolitan areas. Investing in rural housing can avoid many social challenges. The monthly inflation rate for urban households is 3.2 percent, down 0.4 percent from the previous month. The rate for rural households was 3.2 percent, unchanged from the previous month.