Tehran Annual House Sales Up 5.4%

EghtesadOnline: Data released by the Central Bank of Iran for the last Iranian year that ended on March 20 put the number of residential housing deals in the capital Tehran at 162,100–marking a 5.4% annual growth from the previous year.

News ID: ۷۴۰۶۹۴

03 April 2017

Although this indicates that the property market has yet to rise from its long slumber, the positive figure is nevertheless deemed good news for the beleaguered sector.

The average price of a square meter of a house in Tehran also grew by 5.4% to reach 43.9 million rials ($1170).

This is while last year, the number of home sales and the average sale price per square meter of homes in Tehran had dropped by 10.2% and 0.4% respectively year-on-year. Hence, the growth in both fronts could mark progress for the market, according to Financial Tribune.

As the report suggests, the number of home sales in Tehran reached 12,200 in the last month of the previous year, indicating a 21.6% rise compared with the previous month.  However, the figure dropped by 6.4% compared with the correspondent figure of last year.

According to the latest survey by the Central Bank of Iran, the average price of houses in Tehran during the one-month period was recorded at 45.7 million rials ($1,200) per square meter, which marks a 1.5% and 5.2% rise compared with the prior month and the same period of last year, respectively.

Rents also increased in tandem with house prices and marked a surge of 11.3% and 9.4% in the city of Tehran and in other urban areas of the Tehran province, respectively.

Some analysts believe that the signs of growth in housing sector do not mark a recovery, as they are triggered by the psychological effects of the implementation of the Joint Comprehensive Plan of Action (Iran's nuclear deal with world's powers) and the subsequent lifting of sanctions.

On the whole, the housing sector has recorded its fifth continuous year of negative growth. The recession began back in 2012 when the housing sector experienced a 3.6% negative growth.

The slump has persisted in subsequent years, posting a 14.9% negative growth for the key housing market during the last fiscal year (March 2016-17).

Since 2012, construction permits have experienced a negative growth rate too, with the worst rate of minus 32.1% being recorded in 2014.

According to an article published on the website of Tehran Chamber of Commerce, the weak inflation in the housing sector has pushed it into recession. This has affected the whole economy since 75% of jobs directly and the rest indirectly rely on this key sector.

The government has taken measures to stimulate the housing sector like granting loans through banks for homebuyers and for finishing housing projects which, albeit positive, are far from adequate.