The role of real estate agents on housing prices and rents: the Iranian experience

Abstract

PurposeIn recent years, housing prices and rents have recorded impressive growth in Iran. Several observers believe that real estate agents have had a significant effect on this phenomenon. However, some do not agree with this viewpoint and argue that the role of real estate agents is not that much and housing prices and rents are affected by macroeconomic factors. The purpose of this paper is to investigate whether real estate agents can influence housing prices and rents across provinces of Iran.Design/methodology/approachApplying panel data technique, this paper uses observations from 28 provinces of Iran covering 2000 and 2003 to examine the role of real estate agents on housing prices and rents.FindingsThe empirical results indicate that the increased number of real estate agents and their activities positively significantly stimulate housing prices and rents.Research limitations/implicationsTo the author's knowledge, most studies in this area cover the US and European real estate markets. Since findings for developed countries might not be directly transferable to emerging market economies such as Iran, more work is necessary to obtain a clearer picture of the role of real estate agents on housing prices and rents in emerging economies.Originality/valueAlthough there has been a series of cross‐sectional studies published in this area, few empirical works have examined the effects of real estate agents on housing prices and rents by applying panel data set. The paper begins to fill this gap by analyzing a data sample of 28 provinces of Iran covering 2000 and 2003.