Home construction permits were issued for 53,000 residential units during the last fiscal year (March 2020-21) in Tehran, the lowest on record since the year ending March 2005.
Since that year, an annual average of 126,000 new homes were constructed in the capital city, according to a report by the Persian economic daily Donya-e-Eqtesad.
The lowest number of construction permits during the 16-year period was registered in the year ending March 2016 with 65,500 and the highest was posted in the year ending March 2013 with 253,000.
The impact of this unprecedented recession in real-estate market could pose a threat the market in the current and next fiscal years (March 2021-23) due to the average two-year-long process involved in construction.
Under normal conditions, a total of 10,000 home sales are required in Tehran, half of which, i.e., 5,000, should be new homes. This comes as only 4,450 construction permits were issued during each month of last year. The short supply of homes and strong demand from buyers will push prices higher, making the market unaffordable for many households.
The last Iranian year also marked the sixth consecutive year of decline in the number of new homes supplied to the market. Since the year ending March 2016, an average of only 66,000 new homes were constructed in the capital city whereas 85,000 new homes must be built annually, in view of the rising demand resulting from the formation of new families, marriages and divorces, demolition and reconstruction projects, etc.
CBI Report
In the last Iranian year that started on March 20, 2020, and ended on March 20, 2021, the number of home deals finalized in Tehran totaled 83,303, which shows a 0.3% decline year-on-year, latest real-estate data published by the Central Bank of Iran show.
In the same period, the average price of each square meter of a home in the capital stood at 238.65 million rials ($1,030), signaling a YOY surge of 80.3%.
A total of 5,273 homes were sold in the capital during the 12th month of the last fiscal year (Feb. 19-March 20), registering a 34.6% increase compared with the preceding month but a 48.4% decline compared with the same month of last year.
The average price of each square meter of a residential property in Tehran stood at 302.74 million rials ($1,310) during the month under review, showing an increase of 93.7% over last year’s same month when average prices reached 156.28 million rials ($680).
Home prices in the capital city increased by 6.6% compared to 283.89 million rials ($1,230) in the 11th month of last year.
The CBI data also show that during the month ending March 20, newly-built residential properties up to five years old constituted the highest proportion of deals at 38.4% (or 2,025 deals), down by 6.5 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 those above 20 years, which accounted for 18.9%, 12.8% and 14.4% of total deals compared with the same month of last year’s 16.2%, 10.5% and 12.9%, respectively.
The share of homes that were 16 to 20 years old was 15.6% of the total home deals during the month ending March 20, registering no change compared with the same month of the year before.
The distribution of dealt properties shows that among Tehran’s 22 districts, District 5 grabbed the highest share of total deals at 14.7%. It was followed by districts 10 and four with a share of 8.9% and 8.5%, respectively.
All-in-all, 10 districts (five, 10, four, two, seven, 14, eight, 15, one, and 11) grabbed the lion's share of the deals at 73.7% with the remaining 12 districts holding a 26.3% share.
Among Tehran's 22 districts, District 1 registered the highest average home price of 687.2 million rials ($2,980) per square meter. District 18 offered the capital city's cheapest homes with an average per-square meter price of 121.3 million rials ($520). The aforesaid numbers show a respective increase of 104.7% and 58.6% YOY.
Residential units with an average price range of 150 million rials ($650) to 200 million rials ($870) per square meter were the most popular in Tehran during the Iranian month under review, as they grabbed a 16% share of all deals. They were followed by units priced at 200 million rials to 250 million rials ($1,080) per square meter with a share of 15.7% and homes priced at 100 million rials ($430) to 150 million rials per square meter with a share of 12.6%.
From the total number of deals, 61.4% belonged to homes cheaper than the average per-square meter price of the city (i.e., 302.7 million rials or $1,310).
Residential units with a floor area of 50-60 square meters registered the highest number of sales with a 14.8% share of total deals.
Units with an area of 60-70 square meters and 70-80 square meters came second and third with a share of 13.3% and 11.3%, respectively. All-in-all, residential properties with an area of less than 80 square meters had a 52.6% share of total deals.
CBI data further show that Tehran’s homes worth between 5 billion rials ($21,740) and 10 billion rials ($43,470) were the most popular with a 19.7% share of total deals. These were followed by homes with a price tag of between 10 billion rials and 15 billion rials ($65,210) and those priced at between 15 billion rials and 20 billion rials ($86,950) with a share of 17.1% and 11.5% of total deals.
Collectively, homes valued under 20 billion rials had a 51.6% share of total home deals in Tehran during the 12th month of last year.
The central regulator also reports changes in tenancy prices in the capital city and across the urban areas.
According to CBI, the price of rented residential homes in Tehran and across urban areas increased by 31.4% and 35.2% respectively during the 12th month of last Iranian year compared with the corresponding month of the year before.
SCI Report
Tehran’s housing Consumer Price Index in the 12-month period ending March 20, which marks the end of the 12th month of last Iranian year, increased by 78.2% compared with the corresponding period of last year, latest data released by the Statistical Center of Iran show.
SCI had put the average annual inflation rate for the preceding Iranian month, which ended on Feb. 18, at 75.4%.
The housing inflation for the month under review registered a year-on-year increase of 81.9%. The year-on-year inflation of the month ending Feb. 18 was 91.3%.
The housing CPI (using the Iranian month to April 19, 2016 as the base) stood at 689.9 for the month under review, indicating a 3.2% growth compared with the month before.
During the month ending Feb. 18, the housing CPI stood at 668.5, registering a 4.7% increase compared with the previous month.
