"According to latest reports by the Central Bank of Iran, the private sector's housing activities experienced a positive growth last year, as investments in home construction during the first nine months of the year [ended Dec. 21, 2017] increased by 12% compared with the same period of the year before," Ali Chegini, the head of Planning and Housing Economy Office at MRUD, also told HIBNA.
This is while previous data for the preceding years had indicated falling investments. That was during a long five-year period of recession for the beleaguered housing sector that had failed to rebound following Iran's nuclear deal as other sectors did. The sector also witnessed some of its steepest declines yet during the period, as it contracted by 13% and 17% in the fiscal 2015-16 and 2014-15 respectively.
The nine-month growth in the fiscal 2017-18 signals another consecutive growth rate in housing investment. CBI's previous data had shown that private sector investments in the housing sector had increased by 12.4% during the first half of the previous fiscal year to Sept. 22, with special focus on residential units, Financial Tribune reported.
According to Chegini, a rise in building construction permits across urban areas, a positive growth rate in the added value of housing and construction sectors last year and a surge in home construction coming on the heels of a hike in home deals showed that the sector has successfully exited recession.
"The volume of private sector investments in residential and non-residential construction during last year is the final sign confirming the boom in construction sector," he said.
According to Chegini, Iran's private sector invested a total of 559.13 trillion rials ($13.31 billion) in the housing sector in the first three quarters of last year, from which 140 trillion rials ($3.33 billion) were to kick-start new projects, 320 trillion rials ($7.61 billion) were to advance ongoing projects and 90 trillion rials ($2.14 billion) were aimed at completing half-finished projects.
This shows that investors showed the highest amount of interest toward projects whose construction work had already commenced.
The ministry official said the significant 51% increase in investments on these projects was due to the positive reaction of builders to increase home deals last year.
"Usually constructers are incentivized to start completing projects that they had defined during periods of recession with notable speed because they want to sell," he said.
Chegini further said the provinces of Tehran, Isfahan and Fars grabbed a 42% share of total private sector investments, of which Tehran showed a 27.5% annual growth.
CBI data show 96,919 buildings with residential or non-residential functions were constructed across Iran's cities, indicating a 1% increase in terms of numbers. The total floor area of the buildings equaled 55.70 million square meters.