Iran: Home, Land, Rent Prices Increase as Deals Decline in Q3

EghtesadOnline: The Statistical Center of Iran has published its latest report on home and land prices in addition to rents, which indicates a significant rise across urban areas during the third quarter of the current fiscal year (Sept. 23-Dec. 21, 2018), marking the autumn in Iran.

News ID: ۷۴۶۸۳۴

03 March 2019

According to the report, published on the website of SCI, the average price of each square meter of residential floor area surged by 60.3% in Q3 on a year-on-year basis. When compared with the previous quarter (summer), prices registered a growth of 17.8%.

The minimum price of each square meter of residential floor area across urban areas during this year's Q3 stood at 864,000 rials ($6.3) with the maximum price registered at 513.72 million rials ($3,749). The average price was 26.23 million rials ($191.45).

In terms of the number of deals for residential floor areas, Q3 saw a decline of 11.3% compared with the Q3 of last year. Against Q2 of the current year, the number of deals registered a decrease of 29.3%, according to Financial Tribune.

SCI put the average floor area at 107 square meters in deals while putting the average age of residential units at 11 years.

Land Prices, Deals

The average price of each square meter of vacant land, or of a rundown residential property (residential units that are considered old to a degree that only the underlying land is useful for construction) in Iran’s urban areas went up by 79.3% in Q3 compared with last year's corresponding period. Prices increased by 21.6% compared with this year’s Q2 or the summer of the fiscal 2018-19.

The minimum price of each square meter of land or of a rundown property stood at 440,000 rials ($3.21) while the maximum was 500 million rials ($3,649), bringing the average to 20.97 million rials ($153).

The number of land deals struck in Q3 increased by 40% compared with the similar period of last year and decreased by 0.6% when compared with the second quarter of this year.

The average area of each deal reached for vacant land or of a rundown property in real estate agencies across urban areas was reported at 292 square meters by SCI.

Rent Prices, Deals

SCI also disclosed figures for monthly home rents plus 3% collateral legally paid to rent 1 square meter of residential floor area.

It reported that the average rent prices increased by 25.4% during this year's Q3 compared with the Q3 of last year while they grew by 0.9% compared with the second quarter of this year.

The minimum cost of each square meter of residential floor area rented in Iran's urban areas stood at 1,818 rials (1.3 cents) with the maximum being registered at 1.57 million rials ($11.45), bringing the average to 109,123 rials (79.6 cents) per month.

Compared with the third quarter of last year, the number of this year’s Q3 rent contracts decreased by 12.8% whereas they fell by 36.7% compared with the second quarter of the current year.

SCI reported the average area of total rent contracts at 97 square meters and put the average age of rental homes at 13 years.

All figures reported by SCI employ data extracted from the state-run Tenement Management Information System operated by the Ministry of Roads and Urban Development. Established with the aim of making home purchase and renting deals more transparent, the system legally requires all certified real estate agencies to register their deals.

In light of the fact that sudden changes in the number of deals in major cities led to a significant change in prices across a province or the whole country, the report uses a balanced weighted average for its reports to identify real price changes by eliminating the effect of home deals.

The related weights were based on occupied residential units surveyed during a nationwide census conducted in the fiscal 2015-16.