Economy, Business And Markets

Housing Stagnation Here to Stay

Housing Stagnation Here to StayHousing Stagnation Here to Stay

The housing market is not expected to climb out of recession by the end of the current Iranian year (March 2016) but could see some improvement next year, said a senior official at the Ministry of Roads and Urban development.

“Prices will remain unchanged until the end of the year. However, the market may see an upturn next year after the full implementation of the nuclear deal and a possible economic revival.” managing director for office of planning and economy Ali Chigini said on Saturday, Eghtesadnews reported.

Chigini said the housing sector is experiencing boom and bust cycles, “but it should be directed toward stability by preventing prices from falling sharply at one end of the cycle and blocking them from skyrocketing at the other end because either outcome would hurt both manufacturers and consumers.  

Data has it that the real estate market has been hit hard by stagflation affecting the volume of sale and prices.

The official referred to falling prices in summer and predicted the market to remain stagnant until the year is out. “Unfortunately low prices will lead to fewer constructions in the long run,” he warned.  

Official data indicate that the number of construction permits has remained flat and is not likely to grow before next March, offering no respite for the construction sector seen as a determining factor on the growth chart.

Chigini added that since construction projects usually take between 18-28 months to complete, the present slow pace in new constructions will likely affect that sector for another two years.

Private builders and property developers are seemingly on the edge as the real estate market refuses to budge while both buyers and sellers wait for better bargains, not to mention that the purchasing power of most middle-class Iranians has declined due to the bad economic conditions.

 “Fewer construction permits for two consecutive years means we’re going to have fewer homes for a year or two, “ the ministry official said.