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Iran housing sector may face 30% drop in prices

Business Materials 17 November 2018 10:57 (UTC +04:00)

Tehran, Iran, Nov. 17

Trend:

Iran housing market may face 25-30 percent of price drop by late January, if the country's foreign currency rate continues to fall, Deputy chief of Tehran Real Estate Consultants, Hesam Oghbaie told Trend.

"If the foreign currency rate continues to drop or even if it remains at the same level of 11,000 tomans, we may witness a 25-30 percent drop in housing prices in late January," he said.

The value of foreign currency rate in Iran has recently collapsed.

"The housing market always reacts to changes later than other markets, therefore we can not witness a sudden drop, while the foreign currency falls quickly, and we see the drop of prices," he said.

The real estate price hikes have coincided with a enormous drop in transactions. The issue of less sales but higher prices stems from the severe devaluation of the Iran Rial.

"The rise of foreign currency rate had an impact on the rise of prices in housing market, specially in big cities that lead to low transaction and recession," he added.

"The housing market in Tehran witnessed a 25-percent drop in transactions in June, compared to the same period last year, the collapse continued to grow throughout the summer, in October it reached a 40-percent fall," Oghbaie noted.

"According to the Central Bank of Iran, the average rise of housing prices in Tehran was 83 percent, while other regions face 100-percent rise in market prices. The average price per square meter for housing reached to 85 million rials, while the price was 45 million in the same period last year," he said.

The non-stop rise in housing prices within several months has caused the a surging inflation in Iran's housing sector.

"Although the rise in prices of construction materials, taxes of municipalities, land prices have led to the increase of housing prices but the rise of foreign currency rate played the major role in the market," said Oghbaie.

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