A simulation of housing price changes in ten metropolises of the Iran: Using a system dynamics approach

Housing is considered to be the main asset in the portfolio of households in the Iranian economy. The changes in housing prices, will change the wealth of citizens over the time and consequently will change the utility of consumption. Given the different composition of assets for different individuals, the change in housing prices will cause different people's wealth to change relative to each other. Therefore, the control of housing prices at metropolises is the most important challenge, the Iran’s Government is facing. The study aims to investigate the causal relationship between macroeconomic variables and demographic factors to predict the average possible price per square meter of housing in ten formal metropolises of the country until 2022 and by presenting scenarios, to provide a context for resolving the mentioned challenge. We used the Vensim DSS software to simulate the research model and system dynamic approach to derive the results.  Findings indicate that a 10% increase in oil prices and exchange rates, taking into account the same rate of change in migration, the growth of housing prices in Iran will reach to an average of 26.43 and 5.6 percent respectively.