An analysis of housing market in Tehran Province using system dynamics

Document Type : Research Paper


1 Prof., Industrial Engineering Department, Faculty of Engineering, Eyvanekey Institute of Higher Education, Semnan, Iran

2 MSc. in Industrial Engineering, Faculty of Engineering, Eyvanekey Institute of Higher Education, Semnan, Iran


[Naeini1]  Housing is the third top factor in human life, after food and clothing in all communities. Many variables are involved in determining housing prices and it is impossible to ignore housing feedback. One of the powerful tools to determine the impact of policies in this field is using system dynamics approach. According to this approach, the cause-and- effect diagram of factors affecting housing prices in Tehran is presented for dynamic model. To simulate the intended model Vensim software was used. Finally, scenario making was conducted to consider various policies in housing market. The results show that enhanceing other provinces' facilities, increasing the supply of affordable housing by the government as well as loaning for construction decrease the housing price thereby the price would be balanced.



Atefi, Y., Minooei, F. & Dargahi, R. (2010). Housing affordability: A study of real estate market in Iran. In Proceedings of the 28th International Conference of System Dynamics Society. (In Persian)
Che, J. (2005). Modeling Shanghai Real Estate Market: Dynamic Insight into the Sustaining House Price Growth. It’s online at: http:∥www.
Daneshpour, S. A & Hosseini, S. (2012). Place of physical factors in the reduction of housing prices, Journal of Specialized of Architecture & Urbanism, 5(9): 61-71. (In Persian)
Economic Statistics Department of the Central Bank of the Islamic Republic of Iran, It’s online at:
Eichholtz, P. & Lindenthal, T. (2014). Demographics, human capital, and the demand for housing. Journal of Housing Economics, 26: 19-32.
Forrester, J. W. (1969). Urban Dynamics, The MIT Press, Cambridge. pp. 14-15.
GhafelehBashi, H. (2009). System dynamics model of housing market. Thesis. University of Science and Technology. Tehran. (In Persian)
Ho, Y. F., Wang, H. L. & Liu, C. C. (2010). Dynamics model of housing market surveillance system for taichung city. In Proceeding of the 28th International Conference of the System Dynamics Society, Korean System Dynamics Society, Seoul, Korea, ISBN. pp. 978-1.
Hu, Y. (2003). Study of system dynamics for urban housing development in Hong Kong. Dissertation. The Hong Kong Polytechnic University. Hong Kong.
Inanloo, A. (2002). Planning and analysis of housing supply and demand in north of Qazvin. Thesis. Tarbiat Modarres University. Tehran. (In Persian)
Keynes, J. M. (1937). The general theory of employment. The Quarterly Journal of Economics, 51(2): 209-223.
Ministry of Works and Urban Development, the Islamic Republic of Iran, It’s online at:
Nazari, M. (2010). Monetary policy and the housing bubble in Tehran, Journal of Economic Research, 91: 229-241. (In Persian)
Paciorek, A. (2013). Supply constraints and housing market dynamics. Journal of Urban Economics, 77: 11-26.
Skartveit, H. L., Goodnow, K. &Viste, M. (2007). Visualized system dynamics models as information and planning tools. In Informing Science+ IT Education Conference Proceedings, 1113-1128.
Sommervoll, D. E., Borgersen, T. A. & Wennemo, T. (2010). Endogenous housing market cycles. Journal of banking & finance, 34(3): 557-567.
Statistical Yearbook of the country, Statistical Center of Iran (2012). It’s online at:
Sterman, J. D. (2000). Business dynamics: systems thinking and modeling for a complex world (Vol. 19). Irwin/McGraw-Hill. Boston.
Taheri, S. (2010). Housing market analysis in Iran by using system dynamics model. Thesis. Tehran University. Tehran. (In Persian)