According to the latest figures released by the Central Bank of Iran–the entity in charge of releasing official economic data–the average price of an apartment in Tehran during the aforementioned month also reached 48.9 million rials ($1,192) per square meter, registering a 10.9% growth compared with the same month of previous year.
In the first eight months of the current Iranian year (started March 21), the average price of homes in Tehran and the number of their sales increased by 7.1% and 7.7% respectively. The average price stood at 46.5 million rials ($1,134) while the number of deals exceeded 113,800 during the period.
Due to its significant share in the country's real estate, Tehran's property market is often indicative of the national status of an industry that supports some 300 subsectors, according to Financial Tribune.
This is while during the eighth Iranian month to Nov. 21, the number of home sales and the average price of a square meter of an apartment in the capital registered a respective increase of 6.9% and 2.1% compared to the same month of the previous year.
New apartments (up to 5 years old) still account for the lion’s share of house sales in Tehran at 47.2% on November, but their share witnessed a decline of 5% year-on-year.
However, as the Iranian government provided incentive packages for builders to move their activities to distressed parts of the city and rebuild old neighborhoods, during the one month period, demand for houses that were 16-20 years old witnessed an annual surge of 78.4% to account for 12.7% of the total house sales in the capital.
As the report indicates, residential units older than 20 years and apartments that were 6-10 years old also experienced an increase of 49.1% and 24.2% in their sales YOY, marking 9.3% and 15.6% of the total number of deals, respectively.
District 5, located in the city's northwest, recorded the highest number of residential real-estate deals during the month to May 21, accounting for 16.5% of the total deals in the capital. District 4 and 2 followed with 11.6% and 10.1%, respectively.
As cited in the report, the average price of residential units in District 5 reached close to 60 million rials ($1,463) per square meter which, according to CBI statistics, is considered to be above Tehran's average price.
This is while high-end District 1with an average price of 102.7 million rials ($2,504) is the priciest area while on the opposite end of the city in southern parts–including District 18 (the cheapest neighborhood)–the average home price hovers around 23.7 million rials ($578) per square meter. Prices in districts 1 and 18 grew by 5.5% and 10.8%, respectively.
Rise in Rents, Demand for Cheap Homes
According to the CBI report, rents are also rising in line with the inflation rate. Rents in the city of Tehran and in other urban areas of Tehran Province registered a year-on-year growth of 9.6% and 8.5%, respectively.
Assessments indicate that the costs of renting a residential unit in Tehran account for 33.1% of an individual’s total expenses during a month.
The Iranian government has been endeavoring to end the beleaguered sector's recession that began in 2012. The allocation of cheap loans to first-time homebuyers and incentives for builders, especially in distressed areas, was among government measures undertaken in this regard.
As the CBI survey reveals, cheaper and smaller apartments located in low-priced districts of the city are witnessing increases in both sales and prices, which are indicative of the fact that homebuyers are showing more interest in buying cheaper units in a sign of weaker purchasing power.
According to the report, apartments not exceeding 48.9 million rials ($1,192) per square meter–the average price of a residential unit in the capital–accounted for almost 55% of all real-estate deals during the month to Nov. 21.
This is while 66.2% of the purchased apartments were smaller than 90 square meters. All in all, apartments worth less than 3.5 billion rials ($85,365) accounted for 49.8% of all sales in the eighth Iranian month.