Overview of Iran’s Housing Poverty

Around 36% of Iranian households spent more than 30% of their total expenditure on housing. The percentage of Iranian households who didn’t have access to affordable housing stood at 45% in urban areas and 10% in rural areas compared with the global average of 20%. 

Time needed to become a home-owner in Iran was put at 24.4 years compared with the global average of 10 years. At the provincial level, 79% of households living in Tehran didn’t have access to affordable housing (the highest in the country) compared with 10% each in South Khorasan and Chaharmahal-Bakhtiari. 

Twenty percent of Iranian households had improper housing (those living in slum areas, unsafe structures, or illegal dwellings) in the fiscal 2019-20, which is very close to the global average. Improper housing rate stood at 12% and 43% in urban and rural areas, respectively. 

Poor materials used for constructing houses is the main factor distinguishing improper housing in rural areas. Hormozgan, Sistan-Baluchestan and Gilan registered the highest rates of improper housing with 63%, 57% and 51%, while Alborz and Tehran posted the lowest rate of improper housing with 5.4%.

Three percent of Iranian households suffered from severe housing deprivation (living in highly dilapidated houses due to a lack of access to proper housing), with Sistan-Baluchestan registering the highest rate of 32.8%. 

Housing poverty and lack of access to affordable housing were significantly higher among female-headed households. Fifty-three percent of female-headed households were overburdened by housing costs of more than 30% of their total expenditure compared with 34% of male-headed households. 

The report also shows 24.37% of households with children lived in rented homes compared with 13.89% of households without children.

Close to 1.5% of the Iranian population didn’t have access to safe drinking water, which percentage is considered unrealistic by experts, with 17.5% in Gilan and 11.9% in Sistan-Baluchestan registering the highest and lowest percentages lacking access to safe drinking water. Tehran, Alborz, Markazi and Qazvin registered the highest access rates to safe drinking water in the country. 

Two percent of the Iranian households didn’t have access to a bathroom; with 18% in Kerman and 11.5% of Sistan-Baluchestan lying at the extreme end. Isfahan, Zanjan and Kurdestan register the highest access rates to bathrooms.

The average living space per person in Iran was put at 28.24 square meters, while 4.8% of the population had living space of under 13 square meters. The percentage of people living in spaces smaller than 13 square meters was the highest in Sistan-Baluchestan (38.6%) and Kerman (12.8%). 

The average density of families in a residential unit stood at 1.059 in Iran, with Sistan-Baluchestan and Kerman registering the highest density rate of families in a residential unit with 1.447 and 1.149, respectively.

Steel frames and reinforced concrete were used in the construction of 52% of residential units in urban areas and 22.3% in rural areas in the year ending March 2020. The average rate of Iranian population living in housing units built with non-durable materials (wood, clay, mud and straw) was 15.3%. Hormozgan registered the highest rate of 63% living in such housing units, which was followed by Sistan-Baluchestan with 44%.  The percentage of population living in durable housing units (with steel, concrete and bricks used as building materials) was the highest in Alborz, Qom and Tehran. 

 

 

Monthly Construction PMI Plunges 

The latest report by Iran Chamber of Cooperatives shows the Purchasing Managers’ Index for Iran’s housing sector has dropped to a 16-month low.

The Purchasing Managers’ Index for the housing sector in the fourth month of the current Iranian year (July 23-Aug. 22) settled at 38.57 from 54.87 in the preceding month (June 22-July 22), indicating a 29.7% monthly decrease.

PMI is an indicator of the health of economic sectors and provides information about current business conditions to decision-makers, analysts and purchasing managers. 

Raw material inventory, employment conditions, new orders, supplier deliveries and export/production conditions were among the criteria quizzed, yielding a final score of between 1 and 100. 

If a business scores 50, it means that no change has been perceived compared to the previous month, while scores higher or lower than 50 indicate that the business is booming or stagnating respectively. 

The survey includes 12 questions about business conditions and any changes, whether it be improving, no changes or deteriorating. 

It is measured through a monthly survey sent to senior executives of 100 companies active in the real-estate sector. It is based on five major survey areas: "new orders" with a coefficient of 30%, "raw material inventory" (10%), "production" (25%), "supplier deliveries" (15%) and "employment" (20%).

The "new orders" sub-index stood at 40.35 in the month ending Aug. 22, indicating a 12.74% decline compared with 46.24 of the month ending July 22. 

The "supplier deliveries" sub-index, which measures how fast deliveries are made, plummeted by 13.58% from 50 in the month ending July 22 to 43.21 in the month ending Aug. 22. 

The "raw materials (construction materials) inventory" sub-index slid 20.95% from 50.6 in the month ending July 22 to 40 in the month leading to Aug. 22.

The "employment" sub-index fell 4.3% from 50 in the month ending July 22 to 47.85 in the month ending Aug. 22. 

 

 

CBI Report on Tehran’s Housing Market 

Latest data published by the Central Bank of Iran show a total of 5,500 homes were sold in Tehran during the fifth month of the current fiscal year (June 22-Aug. 22), registering an increase of 8.4% compared with the preceding month but a 39.4% decrease compared with the same month of last year.

This is the fourth consecutive month of rising sales.

The CBI data also indicate that the average price of each square meter of a residential property in Tehran stood at 309.7 million rials ($1,147) during the month under review, showing a surge of 34% over last year’s same month as average prices reached 231.07 million rials ($855). Home prices in the capital city grew by 3.1% compared to 300.45 million rials ($1,112) in the fourth month of the current year. 

The CBI data also show that during the month ending Aug. 22, newly-built residential properties up to five years old constituted the highest proportion of deals at 32.2% (or 1,825 deals), down by 5.3 percentage points compared with the same month of last year. 

The lost share was added to homes with a lifespan of six to 10 years, 11 to 15 years, 16 to 20 years and above 20 years. They accounted for 22.4%, 14.9%, 17.8% and 11.8% of total deals compared with the same month of last year’s 18.3%, 13%, 17% and 13.3%, respectively. 

The distribution of dealt properties shows that among Tehran’s 22 districts, District 5 grabbed the highest share of total deals at 16.1%. It was followed by districts 10 and two with a share of 10.8% and 8.8%, respectively. 

All-in-all, 10 districts (five, 10, two, four, 14, one, seven, eight, 15 and 11) grabbed the lion's share of the deals at 73.2% with the remaining 12 districts holding a 26.8% share.

Among Tehran's 22 districts, District 1 registered the highest average home price of 645.6 million rials ($2,391) per square meter. District 18 offered the capital city's cheapest homes with an average per-square meter price of 144.1 million rials ($533). The aforesaid numbers show a respective increase of 22.2% and 47.8% YOY.

Residential units with an average price range of 150 million rials ($555) to 200 million rials ($740) per square meter were the most popular in Tehran during the Iranian month under review, as they accounted for 17.2% of all deals. They were followed by units priced at 200 million rials to 250 million rials ($925) per square meter with a share of 15.9% and homes priced at 250 million rials to 300 million rials ($1,111) per square meter with a share of 12.7%.  

From the total number of deals, 59.4% belonged to homes cheaper than the average per-square meter price of the city (i.e., 309 million rials). 

Residential units with a floor area of 50-60 square meters registered the highest number of sales with a 14.9% share of total deals.  

Units with an area of 60-70 and 70-80 square meters ranked lower with a respective share of 14.2% and 12.7%. All-in-all, residential properties with an area of less than 80 square meters had a 57% share of total deals. 

CBI data further show that Tehran’s homes worth between 10 billion rials ($37,037) and 15 billion rials ($55,555) were the most popular with an 18.3% share of total deals. These were followed by homes with a price tag of between 5 billion rials ($18,518) and 10 billion rials and those priced at between 15 billion rials and 20 billion rials ($74,074) with a respective share of 17.7% and 12.7% of total deals. 

Collectively, homes valued under 20 billion rials had a 50.6% share of total home deals in Tehran during the fourth month of the current year.  

The central regulator also reported changes in tenancy prices in the capital city and across the urban areas. 

According to CBI, the price of rented residential units in Tehran and across urban areas increased by 37.8% and 41.2% respectively during the fifth month of the current Iranian year compared with the corresponding month of last year.