Abstract for: A system dynamics approach to clarify the impacts of state loans on real estate market in Iran

In this paper, the effect of state loans on real estate market prices in Iran is investigated through a system dynamics approach. Although the government has given loans to the demand side for the purpose of stabilizing the housing price, the price has increased. In the proposed model, the effects of giving loans to the demand and supply sides of the market have been studied. The market includes investors as well as non-owner families and constructors in the supply and demand side. The results indicate that granting loans to the supply side for construction will be more beneficial than the demand side. In addition, the monetary policies of the government which influence the liquidity in society can influence the market behavior considerably. Thus, it is suggested that first, the government reduce the amount of liquidity in society and second, the government give state loans to the supply side of the market.