Housing market slump reaches highest level in Tehran
Baku, Azerbaijan, Jan.19
By Fatih Karimov - Trend:
Housing market in Tehran has been experiencing its highest recession since the past ten years, ISNA quoted head of real state agencies union of Tehran Hesam Oqbaee as saying on January 19.
Although home prices have declined by 25 percent since the beginning of the current Iranian calendar year (March 21, 2013), but buyers still expect a 10 percent more decline by the end of the year, he added.
Prices are forecast to remain stable by the end of spring, he said.
Since autumn 2011, real estate prices in Iran's major cities, and especially in Tehran, have skyrocketed, turning developers into overnight millionaires.
Part of the increase is due to a rise in the price of housing materials and land, which was triggered by the cut in fuel subsidies and the sharp drop in the exchange rate for the rial in relation to foreign currency.
Some economists say that the huge level of liquidity, which has reached 346 billion dollars during the two terms of the administration of former President Mahmoud Ahmadinejad, is the main reason for the rise in housing prices. However, it seems that the psychological atmosphere created by developers and real estate agents is also at least partly to blame for the current state of affairs.