TEHRAN - The drastic and unprecedented rise in housing prices in recent months is going to lead the housing market to a recession in the coming months, a member of the Iranian Parliament (Majlis) Civil Committee said.

“With the dramatic and unprecedented rise in housing prices, the market is expected to enter a recession for at least three to four years in the coming months, but naturally, as the recession intensifies, housing prices will fall by about 10 to 20 percent,” IRIB quoted Mojtaba Yousefi as saying.

Unfortunately, housing prices have risen by about 200 percent in recent months, and this has created many problems for real house buyers, Yousefi said.

“The main problem is that in such a market real buyers cannot afford to buy houses and instead the market has become a playground for brokers and speculators.”

According to the official, the housing market trend in Iran has been sinusoidal, meaning that housing prices have risen over a period of time and then the market has entered a recession, however, in the last two years the trend has become contrary to the previous years and the housing prices have been constantly increasing.

Based on a recent report released by the Central Bank of Iran (CBI), the housing price in Tehran city has risen 10.5 percent in Mordad, which is the fifth month of the Iranian calendar year (July 22-August 21), from its previous month.

The CBI report also indicates that the housing price in the capital city has risen 77.4 percent in the fifth month of this year, from the same month of the previous year.

The average price of one square meter of a house stood at 231.1 million rials (about $5,502) in the capital city.

Meanwhile, the number of real estate deals has fallen 35.4 percent in Tehran in the fifth month of this year compared to the fourth month, while rising 175.8 percent compared to the same month of the past year.

EF/MA