Is the Housing Market Preparing for a 30% Price Increase by Mid-Aban?

The housing market has been hit by a new wave of turmoil and psychological expectations. Some real estate agents claim prices will rise 30% by the first half of Aban. Mansour Gheibi, housing market expert, says inflationary expectations and psychological hype affect prices more than expert analysis does.

In recent days, some experts and real estate consultants are announcing the increase in housing prices in the coming weeks and claim that the prices will grow by about 30% from the second half of October to the first half of September. This has raised concerns about the new wave of price increases.

These speculations are raised in a situation where the market of construction materials is not safe from price fluctuations, and once again the discussion of the growth of construction costs and its effect on the finished price of residential units has come up.

However, considering the current economic conditions, will the price of housing experience a 30% growth in such a short period? To what extent are these predictions consistent with market realities, and how much of the possible increase in prices is due to economic factors and how much is the result of inflationary expectations and creating space in the market?

Inflationary expectations fuel the increase in housing prices more than expert analysis

Mansour Ghaibi, an expert on the housing market, said about the factors affecting the increase in housing prices: "Perhaps part of this issue comes back to the attack and psychological burden that is imposed on the society. As the famous saying goes, when the water is murky, everyone analyzes this space for themselves, creates opportunities and makes claims. He added: "Of course, some of these claims may be true; Because economic inflammations and indicators and variables that show themselves in these conditions can justify such estimates to some extent."

Ghibi further explained: "However, I believe that the debate about the increase in housing prices or what is referred to as the housing price explosion in cyberspace, rather than being based on technical and expert analysis of economic conditions, comes from inflationary expectations. These expectations are formed in people's minds and make them believe that now is the time to increase housing prices."

Virtual space analyzes can intensify the effect of economic factors

Referring to the role of economic variables in predicting prices, this housing market expert said: "To predict the increase in the price of an economic index such as housing, we must examine its variables and signs. These signs may have an effect of about 10 to 20 percent by themselves, but the inflationary expectations and analyzes that we encounter every day can have a much greater effect by intensifying this space; So that even 40 to 50 percent play a role in speeding up this process."

Ghaibi added: "It is sometimes difficult to identify where the market realities are. "At some point, there is a wave that affects all the analysis, variables and beliefs, and suddenly we see that the prices in the housing market have increased."

A 100% increase in housing prices after Nowruz holidays was not predictable

Referring to the experience of housing price increase after the Nowruz holiday, this housing market expert said: "For example, we stopped working in March and when we returned after the holiday, we faced a nearly 100% increase in housing prices. What economic or expert analysis would have predicted such an increase?"

The increase in the price of gold and currency also affects the housing market

Referring to the effect of price increases in parallel markets on the housing market, Ghaibi said: "Of course, if the price increases in parallel markets such as gold and currency are not controlled, this process will also affect the housing market."

With the increase in the price of materials, builders expect the cost of newly built housing

This housing market expert explained that the increase in construction costs also affects the decision of the builders: "Increasing the price of rebar is one of the important indicators for the builder. The increase in the price of concrete used in construction is another indicator."

He added: "When the builders are faced with the increase in the price of these materials, they get the idea that their final product, i.e. the new residential unit, will also become more expensive in the future."

The increase in the price of newly built units also spreads to older apartments

Referring to the effect of the increase in the price of newly built units on other parts of the market, Ghaibi said: "When the price of newly built units increases in an area, this increase also spreads to older units. As a result, the price of five, 10, and even 15-year-old apartments will increase."

He further expressed his hope that the market's inflammations will be managed and said: "I hope these inflammations will be managed so that we can distance ourselves from these interpretations and analyzes to some extent. "I believe that economic analyzes can be close to reality when the country's economy is relatively rich and we have more stable conditions in the areas of security and investment."

There is a gap between the current prices and the intrinsic value of housing, and it is this gap that is bothering everyone today

In the continuation of this conversation, Ambassador Arjan, referring to the role of the increase in construction costs and inflationary expectations in the growth of housing prices, asked Ghaibi about the difference between the increase in the nominal value and the real value of the property.

This housing market expert replied: "This price increase does not necessarily mean an increase in the intrinsic value of housing. If we refer to the apartments that have been offered at these prices, is their intrinsic value really proportional to the announced price? The problem is that there is a gap between the current prices and the intrinsic value of housing, and it is this gap that is bothering everyone today.