Tehran Construction Permits Up 17%

According to the report published on SCI’s website, a total of 10,954 construction permits for 76,511 residential units were issued by Tehran Municipality last year, indicating a growth of 17.6% in permits and 17.5% in residential units compared with the year before.

The average number of residential units per permit was 7. In Tehran, the total floor area of units with construction permits last year was at 14,341,000 square meters, registering a 21.3% increase over the previous year.

The average floor area of units per permit was 1,309 square meters. A total of 142,039 construction permits for 376,575 residential units were issued by municipalities across Iran’s urban areas last year, indicating a 16.3% increase in construction permits and 16.6% in residential units year-on-year, Financial Tribune reported.

The average number of residential units to be built as part of each permit stood at 2.6. In Iranian cities, the total floor area of units in each construction permit last year was equal to 72,011,000 square meters, registering a 20.5% increase over the previous year. The average floor area of units per permit was 494 square meters.

 Tehran Construction Material Prices Rise 47%

The rise in the number of permits came amid a rise in construction material prices. 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 the Statistical Center of Iran, the index stood at 212.1 in the year ending March 20, 2018, indicating a 12.3% increase compared with the previous year.

The index posted an increase 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. The second biggest boost to the index was given by the price rise of the “lumber” category with 99%. The index for this category hit 401.3 last year.

The “ironware, rebar, doors, windows and fences profile” category price index picked up 81% from the year before to weigh the third biggest pressure on the main index. The index for this category hit 337.7 last year.

 Inflationary Recession

The housing market, especially in the capital city wherein the bulk of home deals are made, has been experiencing an inflationary recession.

The Central Bank of Iran's latest report on property sales in Tehran shows that during the seven months of the current Iranian year (started March 21), the number of home deals finalized in Tehran totaled 35,807, which is down 57.5% year-on-year. In the same period, the average price of each square meter of a home in the capital stood at 127.14 million rials ($1,125), signaling a year-on-year surge of 81.3% compared with the seven months of last year.

Nonetheless, latest figures show the inflationary recession may be coming to an end. A total of 3,401 homes were sold in the capital during the seventh month of the current fiscal year, registering a 22% rise compared with the preceding month.

They registered a year-on-year decline of 63.7% compared with the 9,357 deals of the corresponding month of last year.

Data published by the CBI on its website indicate that the average price of each square meter of a residential unit in Tehran stood at 127.15 million rials ($1,125) during the month under review, showing a surge of 47.7% over last year’s same month, while average prices were registered at 86.1 million rials ($761) then.

Home prices in the capital city increased by 0.4% compared to 126.67 million rials ($1,120) in the sixth month of the current year.