Trends in Iran's Housing Sales, Rents

EghtesadOnline: The Statistical Center of Iran has presented crucial data pertaining to the housing sector in Tehran and across Iran over the past few years, which cover sale and rent price trends, empty homes and old residential units, among others.

News ID: ۷۴۵۴۷۹

19 June 2018

The SCI report was presented in the latest meeting of its representatives with counterparts at the Ministry of Roads and Urban Development, the ministry's website reported.

According to SCI numbers, the sale price of each square meter of residential units in Tehran increased by 100% during March 2012-14.

From that time until March 20, 2017, this trend was stable but by the end of the next fiscal year, the Tehran market experienced a price hike of 30%, Financial Tribune reported.

The winter of six years ago ending March 2012 saw the highest number of home sales in recent years, as the number of deals reached 120,000 in Tehran during that quarter. Another significant point is that the average age of purchased units increased in recent years, exceeding 10 years in March 2018.

"This indicates that newly-built units have been sold with delays during the period," the SCI notes.

Even as the sale of residential units followed a declining trajectory in the past six years as the housing sector became mired in its longest-running recession in recent memory, the value of residential units increased consistently.

Although the increase in home prices was relatively small from 2013 to 2017, the trend of home rent hikes has exceeded that of home prices.

The SCI puts this down to homeowners raising rents on their own, in addition to the decline in bank interest rates to 15% last year, which significantly impacted rents.

In 2012 and just before home and land prices increased significantly, demand for property had increased by 14.1% in Tehran before following a declining trajectory. Since the beginning of the previous fiscal year in March 2017, the trajectory started to rise once again.

Nationwide Numbers

The SCI report indicates that between 2012 and 2016, about 450,000 residential units were constructed across Iran while about six million units are considered poorly-built.

"If we want to revitalize these units and make them durable, it will take over 13 years," it said.

SCI data show that from 1987 until 2017, Iran's population has grown by about 60% while the number of households and residential units has registered a respective increase of 150% and 177%. This shows that the number of constructed homes has been satisfactory, but the pattern of their distribution has been faulty.

"Out of every 10 residential units, at least one is empty" which the SCI puts down to the increase in speculative activities and the emergence of residential units as a major capital asset between 2012 and 2016, in addition to the thousands of units built as part of the controversial Mehr Housing Project that are left without applicants.

"At present, the ratio of empty homes to inhabited homes across the country stands at 11%," SCI reported.

The center also puts the share of housing expenses in the household basket at between 30-34% which it says is very high and demands action.

In conclusion, SCI reported that about 2.89 million households reside in Tehran while there are 300,000 empty homes and 170,000 second homes. About 23% of those households, 24% of the empty homes and 23% of the second homes are located in distressed areas.