Housing PMI Maintains Upward Monthly Impetus

EghtesadOnline: The Purchasing Managers’ Index for the housing sector in the third month of the current Iranian year (May 22-June 21) settled at 60.55 from 57.14 in the preceding month (April 21-May 21), indicating a 5.97% increase, Iran Chamber of Cooperatives reported.

News ID: ۷۸۶۶۲۰

07 July 2021

PMI is an indicator of the health of economic sectors and provides information about current business conditions to decision-makers, analysts and purchasing managers.

Raw material inventory, employment conditions, new orders, supplier deliveries and export/production conditions were among the criteria quizzed, yielding a final score of between 1 and 100.

If a business scores 50, it means that no change has been perceived compared to the previous month, while scores higher or lower than 50 indicate that the business is booming or stagnating respectively.

The survey includes 12 questions about business conditions and any changes, whether it be improving, no changes or deteriorating.

It is measured through a monthly survey sent to senior executives of 100 companies active in the real-estate sector. It is based on five major survey areas: "new orders" with a coefficient of 30%, "raw material inventory" (10%), "production" (25%), "supplier deliveries" (15%) and "employment" (20%).

The "new orders" sub-index stood at 54.44 in the month ending June 21, indicating a 5.4% growth compared with 51.65 of the month ending May 21.

The "supplier deliveries" sub-index, which measures how fast deliveries are made, rose 17.59% from 50.55 in the month ending May 21 to 59.44 in the month ending June 21.

The "raw materials (construction materials) inventory" sub-index improved 13.6% from 48.9 in the month ending May 21 to 55.55 in the month leading to June 21.

The "employment" sub-index soared 9.16% from 48.35 in the month ending May 21 to 52.78 in the month ending June 21.

To calculate housing PMI, seven secondary criteria were also surveyed by ICC, including "raw materials purchase prices", which stood at 81.32 in the month ending May 21. The sub-index dropped 2.31% to stand at 79.44 in the month ending June 21.

"Warehouse inventory" jumped 17.71% to reach 43.33 in the third Iranian month from 36.81 in the second month.

The "exports" sub-index settled at 47.78 in the month ending June 21 from 48.9 in the month ending May 21, registering a 2.29% decline.

"Prices of products or services" grew 2.83% to stand at 66.67 in the month ending June 21 from 64.83 in the month ending May 21.

"Fuel consumption" dropped 8.25% from 59.34 in the second Iranian month to 54.44 in the third month.

"Sales" climbed 12.3% from 49.45 in the second month to 55.55 in the third month.

And, the "performance expectations for the following month" sub-index settled at 61.11 in the month ending June 21 from 58.24 in the month ending May 21, showing a 4.92% growth.

CBI on Tehran Housing

A total of 5,102 homes were sold in Tehran during the third fiscal month (May 22-June 21), registering a 29.6% increase compared with the preceding month but a 52.7% decrease compared with the same month of last year.

Latest data published by the Central Bank of Iran on its website also indicate that the average price of each square meter of a residential property in Tehran stood at 296.73 million rials ($1,186) during the month under review, showing a surge of 56.6% over last year’s same month as average prices were registered at 189.48 million rials ($757) then. Home prices in the capital city grew by 3% compared to 287.96 million rials ($1,151) in the second month of the current year.

The CBI data also show that during the month ending June 21, newly-built residential properties up to five years old constituted the highest proportion of deals at 35.8% (or 1,827 deals), down by 3.1 percentage points compared with the same month of last year.

That lost share was added to homes with a lifespan of six to 10 years, 11 to 15 years and above 20 years, which accounted for 21.4%, 13.7% and 13% of total deals compared with the same month of last year’s 18.9%, 12.7% and 12.5%, respectively.

The share of homes that were between 16 and 20 years old was 16.1% of the total home deals during the month ending June 21, compared with 17% of the same month of last year.

The distribution of dealt properties shows that among Tehran’s 22 districts, District 5 grabbed the highest share of total deals at 13.9%. It was followed by districts 10 and four with a share of 9.8% and 8.1%, respectively.

All-in-all, 10 districts (five, 10, four, two, seven, 15, 14, eight, one and 11) grabbed the lion's share of the deals at 71.8% with the remaining 12 districts holding a 28.2% share.

Among Tehran's 22 districts, District 1 registered the highest average home price of 663 million rials ($2,652) per square meter. District 18 offered the capital city's cheapest homes with an average per-square meter price of 126.1 million rials ($504). The aforesaid numbers show a respective increase of 60.9% and 41.9% YOY.

Residential units with an average price range of 150 million rials ($600) to 200 million rials ($800) per square meter were the most popular in Tehran during the Iranian month under review, as they accounted for 18.6% of all deals. They were followed by units priced at 200 million rials to 250 million rials ($1,000) per square meter with a share of 15.9% and homes priced at 250 million rials to 300 million rials ($1,200) per square meter with a share of 11.7%.

From the total number of deals, 60.8% belonged to homes cheaper than the average per-square meter price of the city (i.e., 296.73 million rials or $1,186).

Residential units with a floor area of 60-70 square meters registered the highest number of sales with a 14.8% share of total deals.

Units with an area of 50-60 square meters came second with share of 14%. All-in-all, residential properties with an area of less than 80 square meters had a 56.1% share of total deals.

CBI data further show that Tehran’s homes priced at between 5 billion rials ($20,000) and 10 billion rials ($40,000) were the most popular with a 20.2% share of total deals. These were followed by homes with a price tag of between 10 billion rials and 15 billion rials ($60,000) and those priced at between 15 billion rials and 20 billion rials ($80,000) with a respective share of 18.2% and 11.9% of total deals.

Collectively, homes valued under 20 billion rials had a 53.4% share of total home deals in Tehran during the third month of the current year.