Tehran Home Rents Up 26.7 Percent in Q1

EghtesadOnline: The average price of renting a residential unit in Tehran jumped significantly on a year-on-year basis in the first quarter of the current Iranian year (March 21-June 21), a report by the Statistical Center of Iran shows.

News ID: ۷۸۳۷۰۹

18 August 2018

Published on its website on Wednesday, the report shows that the average monthly rent plus 3% down payment for renting one square meter of a residential unit dealt through certified real-estate agencies reached 298,360 rials ($7.10) during the period. The figure was higher by 26.7% compared with the similar period of the previous year and higher by 5.8% compared to the final quarter of the last fiscal year that ended on March 20, 2018.

According to SCI, the average area of rented units in this period stood at 78 square meters while the average age of homes was equal to 14 years.

Renting costs have also gone up significantly this year, as have the overall home prices. The rise is due to a combination of ongoing upheavals in parallel markets caused by heavy fluctuations in foreign exchange market that have pulled the rial's value by about two-thirds against the US dollar in the past six months, according to Financial Tribune.

The Ministry of Roads and Urban Development is pursuing a change in the way home rent contracts are devised to curb skyrocketing rents and provide a helping hand to frustrated tenants that face extra pressure every year.

As Hamed Mazaherian, the ministry’s deputy for housing and construction affairs, announced on July 25, the government has submitted a bill to parliament, which aims to make tenants one of the stakeholders of the rental contract. The bill aims to increase the maturity periods of rental contracts to two years or beyond with a guarantee that rent prices will only grow by 10% year-on-year in line with inflation.

The SCI report on Wednesday also dealt with surging home prices and lukewarm deals. The number of home deals in Tehran during this year's Q1 grew by 9% compared to the first quarter of the year before, but signaled a steep 20.5% decline compared to the final quarter of last year.

The average price of each square meter of a residential unit dealt through licensed real-estate agencies stood at 62.47 million rials ($1,487) by the end of this year's Q1. This was 36.9% higher compared to the year before and 6.4% higher compared to the previous quarter.

The average floor area in Tehran's residential deals was registered at 88 square meters and their average age was 11 years.

Old houses and lands in Tehran were slightly less pricey, as the cost of each square meter of a deal pertaining to an old unit stood at about 61.75 million rials ($1,470). This was higher by 33.7% and 3.1% compared to the first quarter and last quarter of the previous year respectively. The average area of these units and land was 259 square meters.

As always, SCI data have discrepancies with those provided by the Central Bank of Iran that monitors Tehran's housing sector in its monthly report. The central regulator had previously reported that 39,039 residential units were dealt in Tehran by the end of this year's Q1, signaling a year-on-year rise of 5.2%.

CBI put the average price of each square meter of a residential unit in Tehran in that period at 60.1 million rials ($1,430), showing an annual growth rate of 36.8%.