Tehran Q4 Land, Home, Rent Prices Increase

EghtesadOnline: The Statistical Center of Iran has published its latest report on Tehran’s home and land prices in addition to rents, which indicates a significant increase during the fourth quarter of the last Iranian year (Dec. 22, 2018-March 20).

News ID: ۷۴۷۲۷۲

08 May 2019

It is noteworthy to compare the price hikes against a backdrop of overall consumer inflation.

According to SCI, the goods and services Consumer Price Index in the 12-month period ending March 20, which marks the end of last fiscal year, increased by 26.9% compared with last year’s corresponding period.

The consumer inflation registered a year-on-year increase of 47.5% in the Iranian month ending March 20 compared with the similar month of last year, according to Financial Tribune.

Land Prices, Deals

According to the report published on the official website of SCI, the average price of each square meter of land (vacant) or land of a rundown residential property (residential units that are considered old to a degree that only the underlying land is useful for construction) in the capital city went up by 142.8% in Q4 compared with the corresponding period of the year before. Prices increased by 44.6% compared with Q3.

The minimum price of each square meter of land or land of a rundown property in the country stood at 14.37 million rials ($95.8) while the maximum was at 638.4 million rials ($4,256), bringing the average to 145.46 million rials ($969).

The number of land deals in Q4 decreased by 36.1% year-on-year but increased by 53% when compared with the third quarter of last year.

The average area of each dealt land or land of a rundown property was reportedly 253 square meters.

Residential Home Prices, Deals

According to the report, the average price of each square meter of residential floor area surged by 81.7% in Q4 YOY. When compared with the previous quarter, prices indicated a growth of 13.5%.

The minimum price of each square meter of residential floor area in the winter stood at 11.08 million rials ($73) with the maximum price registered at about 570.98 million rials ($3,806). The average price was about 106.67 million rials ($711).

In terms of the number of deals for residential floor areas, last year’s Q4 saw a decline of 43.4% compared with the Q4 of the year before. Against the Q3, the number of such deals registered an increase of 21%.

SCI put the average dealt floor area at 88 square meters while the average age of residential units was 10 years.

Rent Prices, Deals

The Statistical Center of Iran 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 21.7% in Q4 compared with the Q4 of the year before while they grew by 1.9% compared with the third quarter of last year.

The minimum price of each square meter of residential floor area rented in Iran’s urban areas stood at 28,000 rials (18 cents) with the maximum being 1.71 million ($11.4), bringing the average to 343,067 rials ($2.28) per month.

Compared with the fourth quarter of the year before, last year’s fourth quarter rent deals decreased by 18.8% whereas they fell by 10.3% compared with last year’s Q3.

SCI reported the average area of total rent deals at 78 square meters and put the average age of rental homes at 14 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.

As sudden changes in the number of deals in Tehran lead 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 used were based on occupied residential units surveyed during a general census conducted in the fiscal 2015-16.

Planning and Housing Economy Office's Latest Report

Latest figures provided by the Planning and Housing Economy Office of the Ministry of Roads and Urban Development show the average price of each square meter of a home in Tehran stood at about 82.41 million rials ($547) in the last Iranian year that ended on March 20, 2019, signaling a year-on-year surge of 71.1%.

This is while a total of 130,396 home deals were signed during the period, which is 29.2% less compared with the preceding year.

The average price of each square meter of a residential unit in Tehran stood at 110 million rials ($730) during the final Iranian month of last year (Feb. 20-March 20), registering a 95.4% increase compared with the previous year's similar month.

The number of home sales in the capital city increased by 3.9% YOY during the one-month period under review to stand at 13,033.

The distribution of deals during the month shows that among Tehran's 22 districts, District 5 grabbed the highest share of total deals with 1,905 while District 19 had the lowest with 63.

Among Tehran's 22 districts, District 1 registered the highest average home prices at 245.55 million rials ($1,631) per square meter, followed by District 3 with 193.46 million rials ($1,285) per square meter and District 2 with 169.03 million rials ($1,123) per square meter.

District 20 offered the capital city's cheapest homes with average per-square meter prices standing at 44.7 million rials ($298).

Average per-square meter price of districts 20, 19, 18, 17, 16 and 12 stood under 60 million rials ($400).