Nowadays housing is not considered merely as a matter of shelter anymore. But it is also considered as a political and economic commodity. Not only housing is one of the most important assets for householders, who hold it to accept higher risks in financial markets, but also it is an indispensable good without any substitute. Recent decades, housing sector has encountered inflationary recessions and booms along with interminable price growth in Iran. This inflation rate is as a result of excessive increases in liquidity, which is due to the spending of oil dollars. However, the inflation rate may be controllable in consumption and tradable goods by some leverages such as imports while it is not controllable in nontradable goods such as housing and land. Consequently, it brings about severe and unpredictable volatilities in the price of this critical sector. In this article, we study the major determinants of housing sector with special emphasis on the relationship between oil shocks and housing inflation. The findings show that during the period 1973 to 2005 the effect of the population growth rate, liquidity growth rate, the growth rate of loans paid by Bank Maskan and (positive and negative) oil shocks on housing inflation are statistically significant and consistent with the theory while the effect of inflation rate on housing inflation is statistically insignificant.