Demand for Newly-Built Homes in Tehran Dwindling

EghtesadOnline: Residential units that have been newly constructed in Tehran still grab a relatively dominating share of home deals in the capital, but this share has been on a declining trajectory in the past five years, official data provided by the Central Bank of Iran show.

News ID: ۷۸۴۲۹۱

05 November 2018

The monetary regulator recently disclosed its latest monthly report on Tehran's residential housing market, which contained data for the seventh month of the current Iranian year that ended on Oct. 22.

According to figures published in the report, 4,162 of a total of 9,357 homes that were dealt in Tehran were newly-built with an age of up to five years, which constitute a 44.5% share of total deals.

Units of ages six to 10 years accounted for 1,468 or 15.7% of all home deals conducted in Tehran in the aforesaid month. They were followed by units of ages 11 to 15 years with 1,363 deals or a 14.6% share and units of ages 16 to 20 with 1,397 deals or a 14.9% share of all deals, Financial Tribune reported.

Lastly, 967 deals were made for units 20 years or older, constituting a 10.3% share of all home deals in the capital.

A year earlier during the corresponding seventh month, units up to five years old had a 46.2% share of all deals. In all, units up to 15 years old had a 77.8% share, which has been reduced to 74.8% during the seventh month of the current year.

Looking at developments in the past five years, newly-built units have experienced the steepest drop in their share of all home deals in the capital city.

During the seventh month of the fiscal 2014-15, units up to five years old had a more dominant share of 55.3% of all residential property contracts compared to the current year's figure.

This share has been gradually transferred to units of ages 15 years or older. Five years ago, units of ages 16 to 20 had a 6.1% share, which has more than doubled to 12.6% in the current year. Units that were 20 years or older, on the other hand, grabbed a 6.6% share of total deals five years ago but are now at 9.6%.

The lower demand for new-built homes in Tehran is partly due to the falling purchasing power of the general public. This has been especially true in the current year when an ongoing currency crisis spurred by returning US sanctions has unleashed severe inflationary effects on all markets.