Determining the factors affecting housing prices in Bandar Abbas

Dissertation for Master's Degree in Executive Management

Abstract:

The purpose of this research was to determine the factors affecting housing prices in Bandar Abbas. The statistical community in this research includes all the experts of the housing foundation organization in Bandar Abbas city.  Sampling was done by cluster method and among the experts in the subordinate offices of Yeniad Maskan in Bandar Abbas city. 182 experts were selected as research samples. The current research was a descriptive and survey research. Descriptive and inferential statistics methods were used for data analysis. The research findings showed that there is a relationship between exchange rate fluctuations and housing stagnation. In addition, the research findings showed that there is a relationship between the demand for housing and housing recession. The findings of the research showed that there is a relationship between the liquidity growth rate and the housing recession. The findings of the research showed that there is a relationship between housing pre-sales and its recession. In addition, the results showed that there is a relationship between the government's financial policy and the housing price. Keywords: Housing price, housing recession, government financial policy, currency fluctuations, Introduction: Housing is one of the most important sectors of the economy in all countries, and for this reason, it has attracted a lot of attention both in economic studies and from institutions and policymakers. The housing market is one of the most volatile sectors of the economy, and its fluctuations can cause fluctuations in other economic sectors.

In recent years, the property market in Iran has expanded significantly. The high growth of liquidity and significant demand for some assets has led to a faster increase in their prices, and this price increase has been higher in the case of assets such as buildings and housing, which have a higher reliability factor. Also, housing is a consumer product that has no substitute despite other household expenses. According to the statistics of the Iranian Statistics Center, the share of housing costs in the household budget is more than 30%. This share is more than 40% in metropolitan cities and up to 100% of the income of the head of the household for the middle and lower income deciles. That is, currently, the average share of housing costs in the household budget in Iran is between 28 and 32 percent. Therefore, on average, Iranian households pay twice the global index for housing. (Maudti, 2010)

The price of housing and its importance:

Among the components of the marketing mix, price is the only factor that generates income. Also, price is known as the most flexible factor of the marketing mix because it can be changed quickly.  Although price competition is one of the major competitive issues that companies face, many companies cannot solve this issue in a proper way.  With the equalization of the quality of the goods of different companies and the intensification of competition, the price element has become one of the most important factors affecting the retention and attraction of customers and their loyalty and satisfaction. This is more common today due to the increasing expansion of communications, especially the Internet and virtual spaces. (Saeidi, 1390) Definition of property pricing: Literally, price means measurement, evaluation, size, and standard. The price in the market is the exchange value of the goods and services expressed in terms of currency. Accordingly, property pricing simply means determining the price for the goods or services. Property pricing is an iterative and continuous process. This continuity is caused by environmental changes and the instability of market conditions, which creates the need to adjust the price. (Saeidi, 1390)

Pricing objectives:

In general, the objectives that companies pursue from property pricing are divided into the following five groups: 1- Maintaining survival and continuity of life

This objective is suitable for companies that have problems with excess capacity, intense competition and constant changes in consumers. If the price can cover variable costs and some fixed costs, the company can continue its business life.If the price can cover the variable costs and some fixed costs, the company can continue its business life. 2-Maximizing the current profit. In order for a company to maximize its current profit, it must estimate the demand and costs related to different prices and then choose a price that brings the most current profit, cash flow or capital return to Armaghan for the company. Of course, in case of over-emphasis on the current profit and not paying attention to the effects of other marketing mix variables, the possible reactions of competitors and legal restrictions, it will jeopardize the company's performance in the long run. (Molaian, 2013) 3-Maximizing market share

Some companies pursue this goal, because they believe that achieving a higher sales volume will reduce the cost of each unit and, as a result, they will achieve more profit in the long run. In other words, such companies set their prices at the lowest level to dominate the market. This strategy can be suitable in the following situations: · The market shows too much sensitivity to the price, as a result, the low price will cause the market to grow. Set the prices at a high level and thereby kill the essence of the market. Companies can achieve this goal in the following conditions: - There are a large number of buyers and high demand in the market - The high cost of each product unit that is produced in a small volume is not so high that the company has to lose some of the benefits of imposing high-priced products on the market. - Setting the initial price at a high level attracts the attention of competing companies. Do not be a market. - Setting the price at a high level creates the impression in the minds of buyers that the company and its products are at a higher level than competitors. (Saeidi, 1390)

5- Advancing in terms of quality

Companies whose goal is to supply high-quality products and want to be a leader in the market in this regard, supply superior products to the market at higher prices. They market very high quality products and also these products have special features that can provide more benefits and benefits to the buyers. Such companies can set prices at a higher level.

Effective factors on property pricing

In order to properly and satisfactorily price the property, the factors affecting pricing should be identified and adjusted. Experts believe that three general categories of factors affecting property pricing decisions are: 1- Organizational factors: There are factors that affect property pricing and deal with the organization's resources and goals. Such as: product life cycle (PLC), and product line property pricing portfolio. 2- Customer factors:

There are factors that affect property pricing from the customer's side because there is an inverse relationship between price and demand. Such as: customer interests and values, created or inherent demand. 3- Market factors: There are factors that are effective on property pricing from the market. Such as: environment and competition. (Rasouli, 2009)

Stages of property pricing

First stage: determining the long-term goal of pricing

In the first stage, the goal of pricing should be determined. The objectives of pricing have a high variety, as explained in the previous section.

Second step: determining the level of demand

Each price leads to a different level of demand and, therefore, will have a different effect on the company's marketing objectives. The relationship between prices and the resulting demands creates a demand curve. To determine the amount of demand, it is necessary that the sensitivity of the demand to the price, estimates, and the elasticity curve of the demand against the price change are also examined. Step Three: Estimate Costs

While demand may determine the price ceiling the company charges for its products, costs will determine the price floor. Accordingly, every company must consider a price that can cover the costs of production, distribution and sale of the product and provide a reasonable return for the work and risk that the company has accepted.