Financial Tribune- Despite the recent surge in the value of gold coin and foreign currencies in the Iranian market, home prices remain unaffected and the sector’s experts believe the housing market will remain steady through the end of current Iranian fiscal to March 20, 2018.
This is while the possibility that many first-time home buyers entering the market with their 800-million-rial ($19,000) home loans had convinced many experts that home prices will increase during the second half of the current Iranian year ending Sept. 22, IRNA reported.
On the other hand, factors such as lower inflation in the real-estate market compared with the general inflation and falling bank interest rates have done much to assure experts that the housing sector will experience a significant boost.
However, as we near the close of the fiscal year’s third quarter, the volume of home sales has not changed significantly and prices of residential units have only slightly increased in line with the inflation rate.
Hesam Oqbaei, the head of Tehran Association of Realtors, also believes that the prices of residential units in the country will not register any significant gains by the end of the current Iranian year.
“Home prices have registered a year-on-year increase of 10% by the end of the month to Nov. 21 and this trend will continue till the [Iranian] yearend,” he added.
The official noted that since the prices of construction material and building permit fees have not increased, home prices have also remained steady and their value will only increase at a slower pace than the country’s inflation rate.
As a result of the government’s policies since President Hassan Rouhani began his second term in August 2017, the volume of real-estate deals during the first eight months of current Iranian year to Nov. 21 across the country has registered a growth of 7.7% year-on-year, the government’s news website Dolat.ir reported.
The price for each square meter of a residential unit in Iran during the period increased by 7.1% to highlight the fact that Iran’s housing market is on the path to recovery.
Moving the Market
This is while the former head of Tehran Association of Realtors also believes that the housing sector has only slightly improved since the beginning of the year(in March 2017) and predicts home prices to increase alongside the country’s inflation rate during the last quarter of the Iranian year.
“The volume of residential real-estate deals has relatively improved after the mourning months of Muharram and Safar, but as housing deals customarily drop during those two months, they rebound later,” Mostafa Qoli-Khosravi also told IRNA.
He added that the government is trying to bring about a boom in the key sector through the allocation of more loans and incentives to both buyers and builders.
However, the government is also careful not to cause any irregular inflation in the market and wants to maintain stability.
This is while an official in the Ministry of Roads and Urban Development announced that the number of construction permits issued in the first eight month of the current fiscal has increased by 10% compared with the same period of last year.
According to Behrouz Maleki, the housing sector’s added value has also marked a year-on-year growth of 7% during the aforementioned time.
“During the years 2010-13, with the implementation of Mehr Housing Project and injection of oil revenues into the housing sector, the volume of construction dramatically surged, as more than 750,000 construction permits were issued during the four-year period,” he added.
However, Maleki emphasized that injecting money alone cannot resolve the woes of the sector, but if the government changes some of its monetary policies, that will impact the housing market.
The government’s decision to increase the ceiling of home loans with lower interest rates has swayed Tehran’s housing market, as more than 14,800 residential units were sold in the Iranian capital during the month ending Nov. 21 to mark an increase of 18.5% year-on-year.