Investigating the effect of dollar fluctuations on the housing market
Changes in the price of the dollar can affect the housing market in three ways. Surveys show that the decrease in the price of the currency subject to the formation of relative stability, on the one hand, affects the negative psychological atmosphere prevailing in the market of housing transactions and causes the improvement of expectations in this market. But on the other hand, it strengthens the possibility of an increase in the purchase demand in the real estate market.
In the meantime, the third force with currency origin will emerge in the housing market, which will lead to a decrease in uncertainty for construction investors. The outcome of the forces is in favor of the housing market.
The real estate trading market had two different days under the influence of the falling dollar price. Field research of the real estate market situation in Tehran last Tuesday and Wednesday indicates: the negative psychological atmosphere in the market of real estate transactions and construction, which had increased in intensity in recent weeks, started on Tuesday due to receiving positive energy from the market. The currency changed to some extent so that yesterday some real estate brokers in areas of Tehran – which had a history of high transactions and at the same time had the largest price jump – announced a stop in the process of pumping uncertainty into the future, in the psychological atmosphere of the real estate market. However, construction workers have not reacted significantly to this currency event.
A wide range of real estate market actors – from buyers to sellers, as well as intermediaries, brokers, and builders – usually react later than other markets in the face of external developments, which of course is due to the nature of the real estate market (low elasticity), but in the event of a decline At least 20% of the dollar price on Monday and Tuesday, because both the buyers and sellers of apartments were waiting for some kind of spark from outside the market in recent months to clarify the future path. They interpreted the currency market as the beginning of a change in the economic situation and reacted to it.
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This post is written by poshtibaniTs