Experts Analyze Impact of Forex Appreciation on Real-Estate Prices

Prices of construction materials are pegged to the value of the US dollar but the decrease in foreign currency exchange rate won’t necessarily lead to the fall in the prices of construction materials, says Alireza Sarhadi, a housing analyst.
“Fresh analyses of real-estate market speak of decline in home prices following the appreciation of rial against the dollar. However, the impact of the decrease in the value of dollar would manifest itself in the form of recession in the real-estate market. During the recession, the number of deals decreases rather than prices, as real sellers or investors who need money would agree to lower prices,” he was quoted as saying by the news outlet of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
“Economics is the key factor that can pull the housing market out of recession. When construction maintains its growth and real-estate development is viewed as an occupation, buying and selling of land would improve. When there is economic stability, builders won’t worry about whether they would be capable of selling their properties. Under the current conditions and given the low level of predictability of economic changes, builders are reluctant to invest in the housing market.”