Tehran Home Prices Rise as Sales Gain

EghtesadOnline: The average house price in Tehran during the Iranian month of Dey (December 21-January 19), increased 9.9% from a year ago —a measure of the cost per square meter of floorspace has revealed.

News ID: ۷۳۹۴۴۳

27 January 2017

The latest survey by the Central Bank of Iran also finds that house prices per square meter registered a monthly increase of 1.4% to stand at 44.9 million rials ($1,166).

The report sees the price increase as a further signal that the key housing market might be on the verge of a recovery, although the sector's performance had failed to impress in the previous month.

District 9 experienced the highest average growth in prices at16.2% compared with the same period last year. Prices for residential units located in District 22 experienced the lowest rise at 0.8%, according to Financial Tribune.

During the 10th month of the year ,16,749 residential real estate sales were registered in the capital which is telling of a 41.6% increase compared with the previous month and a 3.2% rise compared with the same period last year, according to the latest issue of "Trends in Tehran Housing Market" published by the CBI.

Over the 10-month period to January 19, the number of home sales in Tehran reached 134,200, showing a year-on-year growth of 7.9%. During this period, the average price per each square meter was 43.6 million rials ($1,132), indicating a 5.2% increase compared with the same period last year.

At 52.9%, houses built after 2010 had the highest share of residential real estate deals.

District 5, located in the northwest of the city, continues to record the highest number of deals among the 22 districts, accounting for 16% of the total home sales in the city. Districts 4 and 2 come next at 11.2% and 9.9%, respectively.

The upscale District 1 was once more the area with the priciest residences as the average price stood at 101.3 million rials ($2,623) per m2.  District 18 was the least expensive with each square meter priced at 21.9 million rials ($568).

According to the central bank data, rents during the month grew by 11.1% in Tehran and 9.4% in other urban areas of the country from a year ago.

The publication also notes that 60-70-square-meter apartments accounted for 15% of the total sales during the one-month period. Residential units with floor area of 70-80 square meters and 50-60 square meters take the second and third spots, accounting for 13.2% and 13.1% of the total sales respectively.

"Residential units in the price range of 30-35 million rials ($780-909) per square meter grabbed the highest share of the deals in Tehran at 12.8%," the report said regarding the home sales performance in the price category.

Four Years Into Recession

The CBI's new report comes as the housing sector has entered its fourth year of recession and according to the head of the Association of Home Builders, if the downturn persists, it will lead to negative repercussions such as increased unemployment and crime.

"The recession in the housing sector is caused by the broader economic slowdown in the country," Hassan Mohtasham was quoted as saying by Fars News Agency.

"The government must shift course because economic policies are to blame for the stagnancy in the housing sector."

He also noted that the housing sector has a 15% share in the Iranian economy, and therefore the government has no alternative but to assist the beleaguered sector.