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Solutions to deal with speculation in the housing market
Establishing a transaction registration system and housing income tax are the two main solutions in dealing with speculation in the housing market.
Date: November 20, 2017 – 06:26
According to Sada Vasima news agency, Zarei, a member of the parliament’s economic commission, and Parvin Pour, an expert on housing policies, emphasized in tonight’s headline program that with these two strategies, housing hoarding can be prevented and speculation in the housing market can be dealt with, which will also break the housing price bubble. However, Shahriari, a member of the construction commission of the Majlis, and Qoli Khosravi, the head of the real estate union, rejected the statistics and figures presented about speculation in the housing market and emphasized: tax on housing income is not a suitable solution to deal with speculation.
Afshin Parvinpour, an expert in the housing market, said about mediation and speculation in the housing market: We have two demands in the housing market, consumer demand and capital demand, which means the purchase of property for the purpose of use, and capital is the speculative demand that is the buyer or investor of property or land. buys for more profit.
He added: Mediation and trading activities that are done for profit should be removed from the housing market and there should be only producers and consumer markets in the housing market, because the majority of the increase in housing prices is done by these traders.
Parveenpour said: Registration of the National Real Estate System is necessary for housing, which has not yet been done in our country. In this system, the government should monitor the number of properties and owners and the number of transactions. The important point is that due to the housing price bubble, the existence and presence of speculative demands is very high and price flows are determined by these.
Parvin Pour further added: The housing market has special conditions and features that are not the general behavior of other markets. It may be possible to increase the supply in the housing market, that is, housing is built, but the supply does not enter the housing market and is not sold due to speculative behavior, which increases the number of empty houses.
He added: The biggest speculators in the housing sector are banks and financial and credit institutions, which increase the number of empty and hoarded houses by injecting large sums of money into the housing market.
He added: By registering housing transactions, speculation can be reduced, the solution of which is taxation.
Economists believe that if a product is needed by the people and does not enter the market, it can be heated with economic tools, so in transactions, it is possible to prevent the increase of empty houses and the increase in prices by charging income tax in the housing sector. Khali enters the market and speculative transactions are avoided.
He added: The damage caused by the housing market to the economy is not comparable to the car market and so on. Speculation has caused the price of housing to rise to such an extent that the applicant is not even able to pre-purchase, so the housing price bubble can be broken with tax instruments.
If the tax is taken correctly, funds will be imported from the speculative sector to the construction sector. Taxes help to boost production and construction by eliminating speculation.
A member of the economic commission of the parliament said in support of the housing income tax plan: the interpretation of purchasing housing for consumption is different from the interpretation for speculation.
Rahim Zare added: In 1985-1995, the demand for housing for investment and business is almost the opposite of previous years. The price of land in Tehran has also increased 128 times.
This post is written by A_Irandoust