Brief and Clear on the Housing Market: How to Stay Updated in the Housing Market?

Housing is an investment commodity that depreciates, with its price influenced by inflation and policies. It generates income from rent and has a relatively easier customer acquisition process compared to land investments, though the transaction costs are high. Experts say that internal factors in the housing market can be divided into two major categories: "supply factors" and "demand factors." "Land costs" and "construction costs" constitute the costs related to housing supply. These factors are influenced by policies regarding land supply, design, and housing purchase financing. Among the housing purchase facilities in Iran's banking network are the Housing Savings Fund and Youth Housing, the Bank Maskan Premium Deposit Account, the First Fund Savings Account, and renovation loans for housing or dilapidated areas. Construction costs and wages are also significant factors in the supply side. The demand side of the market includes "consumptive housing demand" and "investment housing demand," with speculative demand also accounting for part of the investment housing demand. Consumptive housing demand is heavily influenced by "per capita household income," "housing prices," and factors such as marriage or population growth, while investment demand is affected by "returns on other assets," "price-to-rent ratios," and "inflation." External market variables, which play a significant role in housing market developments, can be divided into "macroeconomic variables" and "cultural-social variables." Among the macroeconomic variables affecting the housing market are oil income, liquidity, inflation, loans granted to the housing sector, and returns from parallel markets such as the stock market, currency, and gold. Indicators of increasing population growth and marriage are also among the cultural and social variables that are very important in determining housing prices. Predictions indicate that at the end of 2017, after announcing the entry into a period of market boom, the future of the housing market was forecasted in two general scenarios. The first scenario predicts a price increase of up to 50%, a short-term surge in purchases, followed by the onset of a recession by the end of 2018 or early 2019. The second scenario suggests a relative stabilization of prices, an increase in transaction levels, and a potential continuation of the boom period until the end of 2019. It seems that the current state of the housing market aligns more with the first scenario, as transactions maintained an upward trend from the second half of 2017 until May 2018, but began to decline from June onwards. Additionally, the number of housing transactions in Tehran in June and July was lower compared to the same period in 2016 and 2015. The housing market entered a boom cycle in the second half of 2017, with the price per square meter of residential units in Tehran reaching about 7 million tomans in July 2018, reflecting over a 50% increase compared to the same period the previous year, while this price increase from July 2014 to July 2017 was only 16%. However, the latest status of this market indicates a deep recession caused by various crises in both supply and demand, as the sharp increase in production input prices and the movement of capital to other markets have exacerbated this recession. The return on the housing sector in the past two quarters has been lower compared to parallel markets such as currency, gold, or even the stock market, creating a significant gap with other markets. This could be seen as a good opportunity for purchasing land or housing, but it should not be forgotten that if the decline in currency and gold prices or the stock market crash continues, sellers will be less willing to reduce the prices of their properties or land. The most likely scenario for the housing market in the last three months of this year is continued inflationary recession and ongoing price increases, albeit at a gentler slope than in the first six months. What to know about trading in this market: Most people who have suffered losses in purchasing housing are those who made mistakes in choosing the "location," meaning they did not realize that housing prices in Tehran are higher than in other cities, and prices in different neighborhoods of Tehran experience varying growth rates. Market experts believe that in addition to the price of the housing itself, attention should be paid to the rate of price growth in that area. Experience has shown that those looking to buy housing for their own use consider prices much higher than speculators, so those who can truly find suitable housing are those looking for sellers who need cash. Those who have difficulties selling or renting their housing have managed to somewhat overcome this problem by increasing advertisements in various media such as newspapers or websites. In this context, the 83% increase in housing prices in Tehran, the proposal in parliament to "oblige owners to rent out vacant residential units," the daily rising costs of living for people in Iran, and the average housing price in Tehran reaching 7 million tomans per square meter are critical developments.