Latest data released by the Central Bank of Iran confirm that Tehran's housing market has been plunged into a state of stagflation.
The data covering the eight months of the current Iranian year that ended on Nov. 21 show home prices in the capital city increased while the number of property deals declined.
Only 6,855 home deals were concluded in Tehran for the month, signaling a year-on-year decline of 53.6% compared with 14,764 deals in the corresponding month of last year.
The number of property deals declined by 26.7% compared with the preceding month (Sept. 23-Oct. 22).
The decline in the number of deals came as the average price of each square meter of a residential unit in Tehran stood at about 91.8 million rials ($752), showing a YOY surge of 91.5% as average prices were registered at 47.92 million rials ($392) last year.
Home prices in the capital grew by 6.6% compared to the 86.1 million rials ($705) in the seventh month of the current year.
The trend of rising prices in tandem with the falling number of deals in Tehran emerged from the third month of the current year that ended on June 21, when prices grew by 45.8% and deals fell by 3.1% respectively. It has only exacerbated in the following months.
Details of Property Deals
During the eighth month of the current year, newly-built residential units and those up to five years old grabbed the highest share of the total number of 6,855 deals with 44%, down by 3.2% YOY.
The lost share was added to units six to 10 years old and homes of ages 16 to 20, which registered a respective share of 16.4% and 14.3% from the total number of deals. The share of dealings for homes above 20 years also improved to reach 11.6% this year from 9.3% of the total deals last year, but they still had the lowest share of total deals in the eighth month. Homes ages 11 to 15 had a share of 13.7% from total deals.
The distribution of the dealt properties shows that among Tehran's 22 districts, District 5 once again grabbed the highest share of total deals with 15.7%. It was followed by districts 2 and 4 with a respective share of 9.4% and 8.8%.
All-in-all, 10 districts grabbed the lion's share of the deals with 74.1%, with the remaining 12 districts holding a 25.9% share.
District 9 registered the highest average annual price growth with a whopping 111% during the eighth month of the current year. District 19 saw the lowest year-on-year average price hike with 48.2%.
Among Tehran's 22 districts, the northernmost affluent District 1 again registered the highest average home price of 196.3 million rials ($1,609) per square meter. District 19 was the capital city's cheapest with average per-square-meter price standing at 40.9 million rials ($335). These figures show a respective increase of 91.1% and 48.2% YOY.
CBI figures show that Tehran's residents once again favored smaller and cheaper homes, as their purchasing power has significantly dwindled in recent months due to massive price hikes.
Relatively cheap residential units with an average price range of 60 million rials ($491) to 70 million rials ($573) per square meter were the most popular in Tehran during the eighth month, as they grabbed a 9.4% share of all deals. They were followed by units priced at 50 million rials ($409) to 60 million rials and 70 million rials to 80 million rials ($655) per square meter with a respective share of 9.1% and 9%.
From the total number of deals, 54.5% belonged to homes cheaper than the average per-square-meter price of the city.
Meanwhile, residential units with an area of 50-60 square meters featured in the highest number of deals with a 14.4% share of total deals. Units with an area of 60-70 square meters and 70-80 square meters stood at second and third places with shares of 13.9% and 11.7% respectively. All-in-all, units with an area of less than 80 square meters had a 53.3% share of total deals.
CBI data further show that Tehran's homes worth between 1.5 billion rials ($12,295) to 3 billion rials ($24,590) were the most popular with a 17.1% share of total deals. Homes with price tags of between 3 billion rials to 4.5 billion rials ($36,885) and between 4.5 billion rials to 6 billion rials ($49,180) came next with a respective share of 16% and 10.8% of total deals.
Collectively, residential units valued at less than 6 billion rials had a 46.6% share of total home deals in Tehran during the eighth month of the current year.
Tenancy in Urban Areas
The central regulator also announces changes in tenancy prices in the capital and across the country.
According to CBI, the price of rented residential units in Tehran and across all urban areas of Iran increased by 17% and 14.4% respectively during the eighth month of the current year compared with the similar period of last year.
The share of housing expenses, including rent, from the expenditure basket of Iranian households stands at 33.1%.
Eight-Month Perspective
During the eight months of the current year (March 21-Nov. 21), the number of home deals finalized in Tehran totaled 91,106, down 19.9% compared with last year's corresponding period.
In the same period, the average price of each square meter of a home in the capital stood at 72.8 million rials ($596), signaling a year-on-year surge of 60.1% compared with the seven months of last year.
