Relative Stability in Rents Predicted

Rents will not experience a significant increase this year, as the presidential elections on May 19 will give impetus to the beleaguered housing sector, the head of Tehran Association of Realtors said.

“Even though the housing sector is still in recession, home sales show an upward trend, prices have become more stable, no price hikes have been witnessed from the beginning of the year [on March 21] and prices are not predicted to increase by the end of the second Iranian month [on May 21],” Hesam Oqbaei also told Eghtesad Online.

While this shows that the housing sector has had a good start, the official said it still cannot be claimed that the sector has come out of recession that it has been grappling with for the last five years.

Oqbaei noted that elections and an increase in home sales next month will be able to “create a pre-boom state” in the housing sector and the next month will “certainly bring about a rise in residential real-estate deals”, reassuring that these conditions will not increase prices.

“Recession in the housing sector entails a decline in deals. However, during years of stagnancy, rents went up, which was contradictory to the nature of recession,” he said.

“This increase was mainly influenced by a profiteering mindset pertaining to home renting, with homeowners trying to use them as long-term deposit accounts in tandem with bank interest rates.”

The share of increase in rents in the past few years have been such that if the volume of deals were to rise in the next few months, it would not be plausible for rents to experience another hike.

Therefore, Oqbaei concluded that the maximum increase in rents will not be higher than 10% in the current fiscal year.