The general price index of construction materials for residential units in Tehran jumped 52.8% during the third quarter of the current fiscal year that ended on Dec. 21 (autumn) compared with last year's corresponding period.
According to the Statistical Center of Iran's latest report published on its website, the index stood at 331 during the period.
The figure indicated an increase of 4.94% compared with the second quarter of the current year, which ended on Sept. 21 (summer), when the index stood at 315.4 and rose by 31.97% when compared with the first quarter, which ended June 21 (spring), when the index stood at 250.8.
During the 12 months ending Q3, the index grew by 37.3% compared to last year's corresponding period, while in the 12 months ending Q2, it had grown by 26.7% and 17.4% respectively.
The category of “cement, concrete, gravel and sand” with a price growth of 9.5% compared with Q2 and coefficient of 14.17% gave the biggest boost to the overall index in Q3. The index for this category stood at 275.2. The category witnessed a price hike of 26% compared with last year's similar period. Its price index grew by 20.2% during the 12 months ending Q3.
The category of "stones" ranked second with a price growth of 14.2% compared with Q2 and a coefficient of 9.79%. The category’s index hit 287.6 in Q3, which was higher by 38.9% compared with the same quarter of the year before. During the 12 months ending Q3, the growth rate of this category's price index was at 17.3%.
The category of "lumber" was the third largest group responsible for the growth in the overall residential construction material price index in autumn. In Q3, the group's index was registered at 443.5, which was higher by 8.9% and 113.8% compared to this year's Q2 and last year's similar period respectively.
The category of “cement, concrete, gravel and sand” with a price growth of 9.5% compared with Q2 and a coefficient of 14.17% gave the biggest boost to the overall index in Q3
In the 12 months ending Q3, the group experienced a growth of 69.6% in its price index. The category has a coefficient of 7.79%.
The category of “ironware, rebar, doors, windows and fences profile” with an 11.2% decline in price index and a coefficient of 18.41% was the main laggard to the overall index growth.
Sale on Credit
Amid rising prices of construction materials, the Ministry of Roads and Urban Development announced that the credit sale of construction materials to major home builders is in the final stage.
"The plan will be carried out in cooperation with Bank Maskan, the state-run agent bank of Iran’s housing sector and will be implemented as soon as it is finalized," Roads Minister Mohammad Eslami said.
The project is aimed at reducing the end price of homes by controlling construction costs, maintaining the quality of construction materials and controlling the inflow of money into the housing market.
"The ministry has yet to set the credit ceiling, but it will be adjusted on the basis of home floor area," Hibna quoted Eslami as saying.
Six-Year Overview
A look at SCI data for the past six years shows that the residential construction material price index has increased in five of those years.
During the fiscal 2011-12, the index grew slightly but continuously in each quarter. The SCI uses 2011-12 as the base year for its calculations and therefore considers the index to stand at 100 during that year.
Next year, the index stood at 116.9 in Q2 and respectively grew to 131.6, 145.4 and 152.9 by the end of the year, indicating an annual 36.7% growth in the index that averaged at 136.7 in that year.
In the fiscal 2013-14, the Q1 index stood at 170.1 and slightly declined to 170 and 167 in the next two quarters only to rebound to 170 in the final quarter. The overall index increased by 23.8% with an annual average of 169.3.
In the following year, the index was registered at 178.1 during Q1 and continued to rise for the next two quarters as it reached 184.4 and 184.7 respectively before falling to 174.9 in Q4. The year's average index was 180.5 that marked a yearly increase of 6.7%.
The fiscal 2015-16 saw a reversal whereby the index first increased to 178.3 and 178.7 in the first two quarters, but then fell to 176.1 and 175.7 in the next two years. With an average annual rate of 177.2, the index contracted by 1.8%, the only time that has happened in the six-year period.
The fiscal 2016-17 saw the residential construction price index rise continuously with quarterly numbers registered at 183.9, 186.6, 193.5 and 191.6 respectively. The index averaged 188.9 during the year to register a 6.6% hike.
During the previous fiscal year, the index's growth became more noticeable as Iran's housing sector was beginning to come out of a five-year recession. During Q1, the index stood at 197.1 and continued to rise to 211.6, 216.7 and 223.1 respectively in the next three quarters respectively.
The index averaged at 212.1 for the entire year to show a yearly rise of 12.3%.
SCI uses the fiscal 2011-12 as its base year for all calculations in contrast to the Central Bank of Iran that last year upgraded its base year to the fiscal 2016-17.
