Economy, Business And Markets

Home Sales Rise Despite Recession

Home Sales Rise Despite RecessionHome Sales Rise Despite Recession

The number of home sales in the current fiscal year (started March 20) has been on the rise, but that does not necessarily mean the housing sector has successfully managed to escape recession, the head of Tehran Association of Realtors said.

Hesam Oqbaei also told Tasnim News Agency that the increase has not been significant enough to signal a market recovery.

According to official statistics, some 36,900 homes were sold in Tehran during the three months ending June 20, showing a growth of 5.6% compared with the same period of last year. This latest uptick comes on the heels of other positive trends that have recently stirred hope of a housing recovery after a long and painful recession.

An earlier CBI report in May showed a 20.4% month-on-month rise in home sales during the month that ended on April 19.

Referring to the fact that the recession gripping the housing market has persisted longer than expected, he said, “We had hoped that lawmakers would reform and amend monetary and banking policies sooner,” in reference to the Banking Reform Bill currently under review in the parliament.  

The official emphasized that the housing market is in a phase in which it is gradually getting past recession and stagnancy.

“In an oil-dependent economy, the housing market is the second biggest driver of economic growth and although the government has been paying extra attention to the sector, a full recovery is yet to take place,” Oqbaei added in reference to the so-called “pre-boom” in the real-estate market.

Oqbaei pointed to the shortcomings weighing on the property market in the past few years and said the government failed to orchestrate and implement schemes that could lead to a significant boost in the housing market, “and in 2014-15, we saw that the number of construction permits declined”.

The senior realtor noted that mortgage schemes have had a meager impact in the sector, claiming that the government’s strategies lacked the potency to energize and create a momentum in the economy.

“The job market in the housing sector also saw no improvement,” he said.

Oqbaei advised that the government needs to take steps to create changes and reforms in the monetary and banking sector, which is the “key factor” in moving the housing sector.

“We hope that with the new parliament swearing in, the plan to reform the monetary and banking sector will materialize, as soon as possible,” he said.