Housing Construction Dwindles in Iran

EghtesadOnline: The Statistical Center of Iran has published its latest figures concerning construction permits, showing that the number of permits issued decreased across the country in the first quarter of the current fiscal year that ended on June 21, 2019, compared with the preceding quarter (Dec. 22, 2018-March 20, 2019).

News ID: ۷۴۹۰۶۲

30 November 2019

According to a report published by SCI on its official website, a total of 15,127 permits were issued by Tehran Municipality in Q1, indicating a 20.2% quarter-on-quarter and a 23.1% year-on-year decline.

The average number of residential units per permit in Tehran was 6.9.

A total of 2,204 housing units are expected to be built as a result of permits issued in Q1, registering a 17.5 QOQ and a 27.9% YOY decrease, according to Financial Tribune.

In Tehran, the total floor area of units with construction permits in Q1 stood at 2,781,000 square meters, registering a 21.7% QOQ and a 21.4% YOY decline.

The average floor area of units per permit in the capital city was at 1,262 square meters.

In the first quarter of the current year, municipalities across the country issued 95,697 building permits, which indicate a 16.5% decline quarter-on-quarter but a 5.5% rise year-on-year.

The average number of residential units per permit across the country was at 2.6.

A total of 36,537 housing units are expected to be built as a result of the permits issued across Iran’s urban areas in Q1, indicating a 21.7% decrease compared with the quarter before but an increase of 6.6% when compared with the corresponding quarter of last year.

Across the country, the total floor area of units in permitted buildings in Q1 was at 17,540,000 square meters, registering 19.3% decline QOQ but 0.6% increase YOY

The average floor area of units per permit was 480 square meters.

CBI Report on Tehran Real-Estate Market

The number of home sales in Tehran increased in the eighth month of the current Iranian year that ended on Nov. 21 while prices decreased compared with the month before, according to the Central Bank of Iran.

Data published by CBI on its official news website indicate that the average price of each square meter of a residential unit in Tehran stood at 124.63 million rials ($1,017) during the month under review, showing a surge of 35.8% over last year’s same month as average prices were registered at 91.79 million rials ($749) then. Home prices in the capital city decreased by 2% compared to 127.15 million rials ($1,037) in the seventh month of the current year.

On the other hand, a total of 4,064 homes were sold in the capital during the eighth month of the current fiscal year, signaling a year-on-year decline of 40.7% compared with the 6,855 deals in the corresponding month of last year. The number of property deals rose by 19.5% compared with the preceding Iranian month.

Data published by CBI on its official news website indicate that during the month ending Nov. 21, newly-built residential units up to five years old grabbed the highest proportion of the total of 4,064 deals at 42% (or 1,707 deals), down by 2 percentage points compared with the same month of last year.

The lost share was added to homes with a lifespan of six to 10 years and those between 16 and 20 years. Homes that were six to 10 years old and those between 16 and 20 years respectively accounted for 18.9% and 16.4% of total deals.

The share of deals concerning homes ranging from 11 to 15 years has also decreased from 13.7% of total deals in last year’s same month to 13.5% this year. Homes above 20 years posted a share of 9.2% of total deals, compared with 11.6% of the same month of the last year.

The distribution of the dealt properties shows that among Tehran's 22 districts, District 5 grabbed the highest share of total deals at 17.2%. It was followed by districts 2 and 4 with a respective share of 9.4% and 8.5%.

All-in-all, 10 districts (five, two, four, 10, 14, seven, eight, 15, one and 11) grabbed the lion's share of the deals at 74.7% with the remaining 12 districts holding a 25.3% share.

Among Tehran's 22 districts, District 1 registered the highest average home prices at 234.8 million rials ($1,916) per square meter. District 18 offered the capital city's cheapest homes with average per-square meter prices standing at 60.5 million rials ($493). These figures show a respective increase of 19.6% and 46.1% YOY.

Residential units with an average price range of 75 million rials ($612) to 90 million rials ($734) per square meter were the most popular in Tehran during the Iranian month under review as it grabbed a 12% share of all deals.

They were followed by units priced at 90 million rials to 105 million rials ($857) per square meter and those priced at 60 million rials ($489) to 75 million rials per square meters with a share of 11.5% and 10.1%, respectively.

From the total number of deals, 55.4% belonged to homes cheaper than the average per-square meter price of the city (i.e. 124.63 million rials or $1,017).

Residential units with a floor area of 50-60 square meters and 60-70 square meters registered the highest number of deals with a 14.9% share of total deals.

Units with an area of 40-50 square meters and 70-80 square meters came second and third with shares of 11.6% and 11.4% respectively. All-in-all, units with an area of below 80 square meters had a 56.5% share of total deals.

CBI data further show that in Tehran, homes worth between 3 billion rials ($24,489) to 4.5 billion rials ($36,734) were the most popular with a 14.9% share of total deals.

Homes with price tags of between 4.5 billion rials and 6 billion rials ($48,979) and those between 6 billion and 7.5 billion rials ($61,224) came next with shares of 12.1% and 10.6% of total deals.

Collectively, homes valued under 9 billion rials ($73,469) had a 53.5% share of total home deals in Tehran during the eighth month of the current year.

During the first eight months of the current Iranian year that started on March 21, the number of home deals finalized in Tehran totaled 39,871. This marks a 56.2% decline year-on-year.

In the same period, the average price of each square meter of a home in the capital stood at about 126.83 million rials ($1,035), signaling a year-on-year surge of 74.1% compared with the eight-month period of last year.

The central regulator also reports on changes to tenancy prices in the capital and across the country.

According to Central Bank of Iran, the price of rented residential units in Tehran and across all urban areas in Iran increased by 31.4% and 31.7% respectively during the eighth month of the current year compared with the similar month of last year.