Referring to the recent hike in home prices and the consequent decline in home deals, Fardin Yazdani noted that the main reason for this is that the housing sector has failed to boost production.
"In other words, despite strong demand in the housing market over the past year, the supply side has failed to catch up," he was quoted as saying by the news service of the Ministry of Roads and Urban Development.
The Statistical Center of Iran's latest report shows the average price of each square meter of residential floor area surged by 59.8% during the last fiscal year’s Q4 (ended March 20, 2019) year-on-year. Compared with the previous quarter, prices indicated a growth of 11.5%, according to Financial Tribune.
The minimum price of each square meter of residential floor area across urban areas during the period stood at 864,000 rials ($6.4) with the maximum price registered at about 570.98 million rials ($4,245). The average price was about 29.26 million rials ($217).
In terms of the number of residential deals, it registered a decline of 16.6% compared with the Q4 of the year before. Against Q3 of the last fiscal year (Sept. 22-Dec. 21), the number of such deals registered an increase of 10.3%.
SCI put the average dealt floor area at 110 square meters while putting the average age of residential units at 11 years.
High Prices of Land, Construction Materials
Yazdani referred to high prices of land and construction materials as the main reason behind the slowing housing production.
"Under the circumstances, builders are not finding the housing market as lucrative as other markets," he said.
According to the SCI report published on its website, the average price of each square meter of vacant land or land of a rundown residential property (old residential units whose underlying land alone is useful for construction) in Iran went up by 121.9% in Q4 year-on-year. Prices increased by 36.6% compared with Q3 or the autumn of fiscal 2018-19.
The minimum price of each square meter of land or land of a rundown property stood at 502,000 rials ($3.7) while the maximum was at 638.4 million rials ($4,746), bringing the average to 28.65 million rials ($213).
The number of land deals made during the last fiscal year’s Q4 increased by 28.6% YOY and 18.8% when compared with the third quarter of last year.
The average area of each dealt land or land of a rundown property in real estate agencies across Iran was reportedly 264 square meters.
The construction material price index for Iran's capital city, Tehran, stood at 313.4 in the last Iranian year (March 2018-19) to register a 47.8% increase compared with the year before.
According to SCI’s latest report published on its website, the index stood at 212.1 in the year ending March 20, 2018, indicating a 12.3% increase compared with previous year.
The index posted increases in all four quarters of last year, with the sharpest quarter-on-quarter growth registered in summer (the second quarter that ended on Sept. 22, 2018) at 25.7%.
The index for summer increased by 49.1% compared with the second quarter of the previous year.
The category of “bituminous waterproofing, bitumen, and asphalt” with a price growth of 124.8% compared with the year before gave the biggest boost to the overall index last year. The index for this category stood at 463.3.