The number of home sales in Tehran slumped to a decade-low of 2,855 deals during the month ending Sept. 22, indicating declines of 72.9% and 15.2% compared with the same period of last year and the month before (July 23-Aug. 22) respectively.
A total of 10,537 home deals were signed during Aug. 23-Sept. 22, 2018, and a total of 3,368 deals were concluded between July 23 and Aug. 22, 2019, Mehr News Agency reported citing latest figure by the Planning and Housing Economy Office of the Ministry of Roads and Urban Development.
The average price of each square meter of a residential unit in Tehran stood at about 129.69 million rials ($1,142) last month, showing a 37.3% increase year-on-year. Each square meter of home in Tehran was sold at an average of 81.22 million rials ($715) in the fiscal month ending Sept. 22, 2018.
However, home prices fell by 1.6% in the sixth Iranian month compared to the previous month–the second consecutive monthly fall following the fifth Iranian month’s 3% decline. That was the first time in months home prices in Tehran had decreased on a monthly basis.
Each square meter of residential units in Tehran were sold at an average of 131.8 million rials (1,161) during the month ending Aug. 22.
The distribution of the deals shows that among Tehran's 22 districts, District 5 grabbed the highest share of total deals with 404 and District 19 had the lowest number of deals with 23.
Among Tehran’s 22 districts, District 1 registered the highest average home price of 248.1 million rials ($2,185) per square meter, whereas District 18 offered the capital city’s cheapest homes with average per-square meter price standing at 56.63 million rials ($498).
About 50% of all deals (1,302) concerned houses located in the first seven districts, indicative of the fact that most home deals were conducted in the northern parts of the capital city.
The Planning and Housing Economy Office of the Ministry of Roads and Urban Development put the total value of all home sales during the month under review at 29,400 billion rials ($259.03 million).
The Central Bank of Iran will publish a more comprehensive report on Tehran’s housing market in a few days.
Inflationary Recession
Iran's housing market has been bracing for inflationary recession amid a widening home supply deficit, the Comprehensive Housing Plan’s deputy for research said.
Referring to increasing home prices in line with a decline in the number of home deals, Fardin Yazdani added 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 82.2% in Q1 (March 21-June 21) on a year-on-year basis.
Compared with the previous quarter, prices registered a 20.7% growth.
The minimum price of each square meter of residential floor area in Q1 stood at 1.06 million rials ($9.29) with the maximum price registered at 668.18 million rials ($5,802).
The average price was about 35.31 million rials ($309).
In terms of the number of deals for residential floor areas, the current year’s Q1 saw a decline of 24.6% compared with Q1 last year.
Against Q4 last year, the number of home deals saw a decline of 13.2%.
SCI put the average dealt floor area at 106 square meters while putting the average age of residential units at 12 years.
Groundbreaking for Construction of 110,000 New Homes
President Hassan Rouhani recently launched the construction project of 110,000 homes in the so-called “National Initiative to Build and Deliver Homes”.
Nearly 20,000 of these residential units will be constructed in new satellite cities, including 7,134 in Fouladshahr in Isfahan Province, 4,448 in Parand in Tehran Province, 2,762 in Golbahar in Khorasan Razavi, 1,547 in Sahand in East Azarbaijan, 1,497 in Sadra in Fars, 800 in Amirkabir in Markazi, 520 in Hashtgerd in Alborz and 150 in Pardis in Tehran Province.
Out of a total of 400,000 homes planned to be constructed as per the initiative, New Towns Development Company will build 200,000, the Urban Development and Renovation Company 100,000 and the Housing Foundation of the Islamic Republic of Iran will construct the remaining 100,000 residential units over three years, Fars News Agency reported.
With the planned construction of 13 new towns by New Towns Development Company, the number of Iran's satellite towns will reach 30.
Currently, a total of 17 satellite towns have been created in 11 Iranian provinces.
The optimal population of satellite towns is estimated to be 3.8 million residents. However, currently almost 80% of their capacity remain unused.
The estimated population of the first-generation residents of new towns was put at 280,000 in March 2006-7, 420,000 in March 2011-12 and 776,000 in 2016-17.
New towns have experienced an 8.8% rate of population growth between the fiscal 2006-7 and 2011-12, and 12.6% between the fiscal 2011-12 and 2016-17.
Their population is estimated to increase to 1.3 million in the fiscal 2021-22 and over 2.5 million in the fiscal 2026-27.
