The housing
market
, as one of the main drivers of the economy, has been at the centre of the attention of different stakeholders in the recent century. Different government policies,
people
's cultures and economical circumstances will lead to different approaches of citizens toward housing. Following I will elaborate that, how uncertain housing markets could be one of the possible causes for
this
unpleasant situation, in which the citizens had to try to buy a
home
rather than
rent
it.
To begin
with, the most simple reason for
such
preference that comes to my mind is the unstable housing
market
, especially when renting is not affordable.
In other words
, some countries, like Iran, with distressed economies, so accelerated the
rent
costs that without owning a
home
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third
of a household's average budget shall be allocated to defray
rent
. In case
rent
cost shows an increasing trend in some consequent years, citizens often decide to manage to buy a house through leasing or
mortgage
, because through
this
solution not only they will be protected from drastically increasing rental costs, but
also
they could own the
home
after repayment period of the
mortgage
and so it could be as a legacy for their children or even could be used for joining reversed
mortgage
contracts after retirement.
Such
status of the housing
market
neither is pleasant nor stable, particularly when excess demand for house ownership exacerbates the situation through a dramatic increase in real estate price and
rent
,
consequently
. To exemplify, from 2012 up to four consequent years, the housing
market
of Tehran, the capital of Iran, experienced skyrocketing rental fees, with nearly 40% annual growth, without appropriate changes in the average salary of Iranian
people
.
Therefore
, in 2017 most
people
moved ahead toward buying houses which led to excess demand and the
next
increase in housing prices. To have a fair indicator, the float annual interest rate of
mortgage
bonds hit 48 per cent, which was unprecedented in recent forty years.
This
has reinforced growth in
rent
costs and presently most economists believe that, though some other externalities have initiated
this
loop, in case the government does not solve or mitigate it,
this
could lead to the total collapse of the Iranian housing
market
.
Therefore
, I believe
such
situations in either Iran or other fragile economies, could be named catastrophic situations.
To conclude, neither I nor anyone else could not raise a deterministic answer about the reason behind the preference for
home
ownership rather than renting,
however
, drastically increases and the uncertain renting prices could be one of the main cases in that
people
decide to own a
home
instead
of renting it.