The general price index of construction materials for residential properties in Tehran, using 2011 as the base year, grew by 34.7% during the four-quarter period ending Dec. 21, 2022, which marks the end of the third quarter of the current Iranian year, compared with the previous year's corresponding period.
The annualized inflation of construction material was 36.7% in Q2.
The general index stood at 1,561 in Q3 (Sept. 22-Dec. 21, 2022), according to the Statistical Center of Iran's latest report published on its website. Compared with the previous quarter, which ended on Sept. 22, the index registered an 8% rise.
In the second quarter of the current Iranian year (June 22-Sept. 22), the construction material price index stood at 1,491 and registered a 3.4% quarter-on-quarter fall.
The index rose by 31.6% in Q3 compared with last year's corresponding quarter (year-on-year). In Q2, the year-on-year index growth was 29.3%.
Compared with the previous quarter, the category of “ironware, rebar, profile for doors, windows and fences” registered the highest growth in price index among all categories of construction materials with a rise of 18.1%.
The “cement, sand and gravel” index declined by 2.2% compared with the preceding quarter.
“Glass” witnessed the highest year-on-year inflation with 63.9% as “ironware, rebar, profile for doors, windows and fences” category witnessed the lowest with 15.2% year-on-year increase.
The highest annualized price rise was registered for “glass” with 76.6%, while the lowest was posted for “ironware, rebar, profile for doors, windows and fences” group with 14.6%.
Average Homes Prices at $255 in Q3
According to the Statistical Center of Iran, the average price of each square meter of residential floor area in the urban areas of Iran in Q3 stood at 117.62 million rials ($255), with minimum and maximum rates at 1.12 million rials ($2.43) and 2.79 billion rials ($6,054) respectively.
The average price rose by 31.4% during the period on a year-on-year basis, SCI said, adding that compared with the previous quarter, prices saw a rise of 3.5%.
In terms of residential deals, last year’s Q3 saw a rise of 43.2% compared with Q3 of the year before. Against Q2, the number of home deals registered a growth of 21.7%.
SCI put the average dealt floor area in Q3 at 109 square meters while putting the average age of residential units at 12 years.
Q2 Construction Permits
SCI earlier published a report on the number of construction permits issued in Tehran and throughout the country during the second quarter of the current Iranian year that ended on Sept. 22, 2022.
Municipalities across the country issued a total of 30,352 building permits in Q2, registering a 3.1% increase compared to the first quarter and a 2.4% increase compared to Q2 of the previous year.
A total of 97,895 housing units are expected to be built as a result of permits issued across Iran’s urban areas, indicating an 8.4% QOQ increase and a 4.6% YOY rise.
The average number of residential units per permit across the country was 3.2.
Across the country, the total floor area of units in buildings was 18.23 million square meters, posting a 6.6% increase QOQ and a 0.9% drop YOY. The average floor area of units per permit was 601 square meters.
A total of 1,588 permits were issued by Tehran Municipality during the same period, indicating a 115.8% rise compared with the previous quarter and a 0.8% decline compared with the same quarter of the year before.
A total of 12,820 homes are expected to be built as a result of the permits that indicate a 115.3% increase quarter-on-quarter and a 2.6% growth year-on-year. The average number of residential units per permit in the capital city was 8.1.
In Tehran, the total floor area of units in buildings with permits issued in Q2 stood at 2,258,000 square meters, registering a 100.3% growth QOQ and a 9.2% decline YOY.
The average floor area of units per permit in the capital city was 1,422 square meters.
Construction Sector Remains Contractionary
Data released by the Iran Chamber of Cooperatives on Purchasing Managers’ Index for the construction sector show it remains in contraction mode.
PMI settled at 42.3 in the 10th month of the current Iranian year (Dec. 22, 2022-Jan. 20), up from 40.95 in the preceding month (Nov. 22-Dec. 21), which indicates a 3.26% increase.
PMI is an indicator of the health of economic sectors and provides information about business conditions to decision-makers, analysts and purchasing managers.
Raw material inventory, employment conditions, new orders, supplier deliveries and export/production conditions are among the criteria surveyed, yielding a final score of between 1 and 100.
If a business scores 50, it means that no change has been perceived compared to the previous month, while scores higher or lower than 50 indicate that the business is expanding or contracting respectively.
The survey includes 12 business criteria and any changes, whether it be improving, no changes or deteriorating. It is measured through a monthly survey sent to senior executives of 100 companies active in the real-estate sector.
It is based on five major survey areas: "new orders" with a coefficient of 30%, "raw material inventory" (10%), "production" (25%), "supplier deliveries" (15%) and "employment" (20%).
The "New Orders" index stood at 41.75 in the month ending Jan. 20, indicating a 1.95% increase compared with 40.95 in the month ending Dec. 21.
The "Supplier Deliveries" index, which measures how fast deliveries are made, decreased by 30.15% from 55.85 in the month ending Dec. 21 to 39.01 in the month ending Jan. 20.
The "Raw Materials (construction materials) Inventory" index decreased by 18.5% from 47.87 in the month ending Dec. 21 to 39.01 in the month ending Jan. 20.
The "Employment" index declined by 7.23% from 52.12 in the month ending Dec. 21 to 48.35 in the month ending Jan. 20.
To calculate housing PMI, seven secondary criteria were also surveyed by ICC, including "raw material purchase prices", which stood at 84.04 in the month ending Dec. 21. The sub-index increased by 7.21% to stand at 90.1 in the month ending January 20.
"Warehouse Inventory" decreased by 2.13% to reach 49.45 in the 10th Iranian month from 50.53 in the ninth month.
The "Exports" sub-index settled at 49.45 in the month ending Jan. 20 from 50.53 in the month ending Dec. 21, registering a 2.13% decrease.
"Prices of Products and Services" increased by 6.99% to stand at 79.67 in the month under review from 74.46 in the previous month.
"Fuel Consumption" decreased by 17.72% from 60.1 in the ninth month of the current fiscal year to 49.45 in the 10th fiscal month.
"Sales" declined from 45.21 in the ninth fiscal month to 44.5 in the 10th month to register a 1.57% decrease.
The sub-index of "Performance Expectations for the Following Month" settled at 45.05 in the month ending Jan. 20 from 48.4 in the previous month, showing a 6.92% decrease.
