Pre-Boom Signs in Iran Housing Sector

EghtesadOnline: A number of positive factors in the housing sector heralds the end of the long-running recession and the beginning of a pre-boom phase in the key sector, the head of Tehran Association of Realtors has announced.

News ID: ۷۴۱۷۳۱

27 May 2017

“Prices are stable in the market while trade volume has registered a growth in the new Iranian year (started March 21),” Hesam Oqbaei was also quoted as saying by Eghtesadonline.com

The average house price in Tehran stood at 43.7 million rials ($1,165) per square meter, registering a year-on-year increase of 3.6%, the latest report of the Central Bank of Iran for the first month of the Iranian New Year (started March 21) has revealed.

Oqbaei noted that the housing sector started the year in a promising mood, but a full recovery has yet to take place, Financial Tribune reported.

“With the presidential election over and summer approaching, which is the high-season for real-estate deals, two important factors are there to trigger a boom,” he added.

The head of Tehran Builders Association also predicted that the pre-boom phase for the housing sector will start this summer as the political situation on a firm footing.

“In coordination with the municipalities, the government could implement effective measures to boost the key sector. For instance, they could stop issuing construction permits willy-nilly,” Hassan Mohtashami also told Fars News Agency.

He added that the construction permits should be issued in areas with high demand for housing, so that capital is not locked in the sector. The value of empty residential houses already exceeds $200 billion.

Mohtashami believes a 15% increase in house prices seems rational since it could promote construction and job opportunities.

Housing is one of the most vital sectors of the economy with almost 300 occupations and industries depending on it. An analysis by the research arm of the Iranian Parliament in late January revealed that the negative growth in the property market has persisted all the way to the end of the previous fiscal year.

President Hassan Rouhani recently weighed in on the housing market and said, “We are facing no recession in our economy, other than the one in the housing sector,” announcing a new 100-day plan for the key sector.

Prior to this, Peyman Qorbani, the Central Bank of Iran’s deputy for economic affairs, told IBENA that while data from the previous fiscal year indicate that housing sector growth in Tehran has been negative, building approvals throughout the country have been on the rise and shows that investments are increasing.

“In spite of everything, the trend in recent years has been to bring about a boom in the housing sector without causing a hike in prices,” he said.