The share of value added of private buildings sector of national GDP without considering oil revenues was between 2 to 5 percent and housing domain possessed 11 to 13 pecent of employment during the last decade. According to some reseraches, constructing every 100 square meters of housing creates six job opportunities. Moreover, nearly 30% of liquidity is in housing sector.

In the 9th and 10th government, adopting expansionary fiscal policies and developing social justice and public welfare in all domains particularly housing were on the agenda and these policies considerably caused flourish housing market specially construction in Mehr housing, but the acceleration in injection of money into housing market and using bank sourses and high-powered money to pay facilities had particular negative consequences. The most importan of them were increase in the monetary base, liquidity and as a result unbridled increase in inflation. By 11th government, economic policies paralel with fiscal disipline changed and the government tried to reduce inflation by restraining liquidity and achieved success largely in this regard and this policy had negative consequences on hosuing market and according to the official statistics, housing construction was faced with downward trend during this time. According to officials, last year construction decreased 50% in Tehran compared to last two years and country average of construction shows 65% decline.

Also, investigating the growth rate of elements of domestic GDP by the Ministry of Roads and Urban Development shows that in spite of improvement of economic growth rate during recent years, the growth rate of added value of building by private sector in 2013, 2014 were respectively -7.5% and -2.1% and also the growth rate of added value of real estates services, professional and specialized services were respectively -0.3% and -0.4%.

On the basis of this report, investigating growth rate of investment on housing sector by private sector in urban areas shows that total investing on housing sector in urban areas in all seasons of 2013, 2014 had generally negetive growth rate in comparison to similar seasons of last year. Therefore, from one hand the housing construction market is without boom and from the other hand, middle and low-income class of Iranian society is not able to buy suitable house. Although government officials have repeatedly stated that they have serious determination to restore prosperity to the housing market, concern of the sudden growth of inflation has stopped policies in this regard. In such condition, also the private sector due to the government policies considers the risk of investing on housing market very high. It seems that if the government adopts its policies in order to boost housing market, he can use private sector’s capacities in order to activate housing domain particularly new cities. According to research center of Majlis, the volume of the monetary base ending in June,2014 has increased more than 20,500 billion tomans and it shows that financial support stop of Mehr housing projects cannot avoid increasing monetary base and liquidity. Therefore, it seems that the government should both emphaszie on strengthening financial discipline and presenting comprehensive policies to boom housing market so that Iran economy would exit recession atmosphere after curbing inflation.

Source: Hamshahri Newspaper, Tuesday, September 1, 2015, No. 6621, page 4