Speaking to ILNA, Poorhajat reacted to Iraq Housing Minister’s invitation from Turkish companies for entering the housing sector of Iraq and said that one should ask Iran’s Roads and Urban Development Ministry, Iran Trade Promotion Organization and Iran Chamber of Commerce why Iraq does not invite Iranian companies to enter its housing sector and these bodies should be asked why the condition and ground has not been prepared for the presence of Iran’s construction and mass construction companies.

He noted that in the issue of technical and engineering services export, there are strong companies in Iran which are able to enter housing sector of other countries but the ground and condition should be provided by the governments and commercial attaches but currently this ground is not ready.

Pourhajat went on to say that Trade Promotion Organization, Roads and Urban Development Ministry and Iran Chamber of Commerce are custodians of this field and they are in charge of creating proper ground for presence of Iranian construction companies in foreign countries, adding that while with the current condition of the country in the past one and half years ago, domestic companies have been willing to enter foreign markets and they have capability to be active in the housing market of countries.

He stated that for mas constructors, Iraq’s market is a less risky market than Iran, adding that while they face a 50% inflation in the country, risk of investment has increased highly and inflation rate is the most influential factor in investment and with such an inflation rate for the private sector and companies there is no possibility for planning in the markets.

Poorhajat emphasized that definitely in terms of factors, investment in housing market of Iraq is less risky than Iran’s market because in Iran people have no notion about the price of housing in the near future and for this reason the project of National Housing Movement and leap in housing production  (construction of 4m houses in 4 years) is one of the essential problems because the final price of these houses in the project is not known and the government announces a new price every day and essentially people do not know with what price they will own the house.

He then pointed to the experience of presence in the international housing sector by Iranian construction and mass construction companies and said that his colleagues in this sector in the past decade have had presence in markets in Africa, Azerbaijan and the UAE, and in the past decade they have entered Iraq’s market.

Poorhajat reiterated that they had successful experience in the foreign markets but they face problems and one of them is restriction created by the sanctions. He emphasized that constructors have faced with restrictions because of the sanctions and they cannot carry considerable amount of money by the baggage because of the financial systems of those countries.

He stressed that the main issue is dollar and value of the national currency and the cost of construction in other countries has been dependent of the dollar rate and they have faced only one to two percent inflation but the story is completely different for Iran’s rial and all international contracts are signed based on the dollar.

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As reported, the information obtained from Kilid website (which is a major platform for housing trades) indicated that the housing price index in Tehran grew by 85 percent in the previous year compared to its preceding year.

The highest monthly price increase of 12.5 percent occurred in the Iranian calendar month of Mordad (July 22-August 21, 2020), while the biggest monthly price decrease occurred in Azar (November 21-December 20, 2020) with a decline of 8.1 percent.

In the seventh month of the previous Iranian calendar year (September 22-October 21, 2020), the annual housing price index in Tehran grew by 121 percent, which was the highest increase compared to the same month of the preceding year.

Coronavirus has been reported to be a major factor affecting the housing prices in Iran as the pandemic has stoked concerns about losing one’s savings and more people entered the housing market.

“People are turning to the housing market in order to protect their savings in the face of rising inflation. No one sees housing as a short-term consumer commodity. Even real consumers view purchasing a home as a long-term investment,” says Mehdi Soltan-Mohammadi, a housing expert.

The average price of each square meter of residential properties in Tehran increased from 263 million rials (about $6,262) in March 2020 to 530 million rials (about $12,620) in March 2021, which shows a 101 percent increase.

Housing prices in Tehran city also rose 78.9 percent in the eleventh Iranian calendar month (January 20 – February 18), as compared to the same month of the past year, according to the latest report released by the Central Bank of Iran (CBI).

Fardin Yazdani, the planner of the Transport and Urban Development Ministry’s Comprehensive Housing Initiative, however, believes that the housing prices in the Iranian market are not going to experience any sudden rise in the coming months and the market will stay stable.

“Given the housing market situation and the trends in other parallel markets, there will be no significant change in the volume of housing transactions in the coming months,” the portal of Tehran Chamber of Commerce, Industries, Mines and Trade (TCCIMA) quoted Yazdani as saying in early March.

The housing market expert further explained that price jumps occur when the rate of price increases in a market exceed the cost increase as well as the inflation rate, so apparently, no price jump is expected in the housing market in near future.

Excessive price increases have left the market with a kind of imbalance between purchasing power and the owner expectations considering the existing prices; therefore, the market has entered a relative recession and this slump in trading is expected to continue, Yazdani said.

He further referred to the liquidity growth and its impact on the housing market and said: “The liquidity growth will ultimately have its negative impacts on the asset market in the long run; as all the statistical data of the last two decades show, one of the most important and influential factors on the housing market has been the liquidity growth, which unfortunately continues to increase.”

According to Parvaneh Aslani, director-general of Housing Economy Office of the Transport and Urban Development Ministry, home prices have registered a 200 percent growth over the past five years.

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