Iran’s sagging housing market may face price shock
With a nuclear deal in hand and the business environment improving, Iranian investors may begin piling cash into the country's ailing housing market — causing a price shock.
Iran’s housing market has been sending mixed signals to potential buyers in recent days. Official data indicates that the market has yet to emerge from a two-year recession. Meanwhile, speculation suggests that a price shock can be expected within the next 12 months.
The average price of an apartment per square meter in Tehran declined 3.1% in July. Home sales dropped by 16.5%.
Some market players don’t think there will be a light at the end of the tunnel as long as President Hassan Rouhani is in office. Majid Eslami, a Tehran-based real estate agent, predicts no significant growth for the housing market, arguing that the Rouhani administration’s “no price shock” policy will continue to act as a barrier.
“The [housing market] recession has nothing to do with the nuclear deal or sanctions relief,” Eslami told Al-Monitor. “If the authorities really want to give a boost to the housing market, they’ll be able to, but they refuse to do so simply because they have already vowed to avoid abnormal market fluctuations. They’re serious in lowering inflation, and a strong real estate market can disrupt their planning,” he said.
