The share of household expenditure pertaining to housing has increased from 33.2% in the year ending March 2014 (President Hassan Rouhani’s first year in office) to 36.4% in the year ending March 2020.
According to a report published by the Ministry of Roads and Urban Development on its website, housing accounted for 33.4% of total household expenditure in the year ending March 2015, 33.7% in the year ending March 2016, 34.1% in the year ending March 2017, 33% in the year ending March 2018, 33.9% in the year ending March 2019 and 36.4% in the year ending March 2020.
A total of 3.58 million homes in urban areas and 479,000 homes in rural areas were built during the seven-year period.
In the year ending March 2014, a total of 834,000 residential units were built in urban areas; 719,000 homes in the year ending March 2015; 548,000 home in the year ending March 2016; 382,000 homes in the year ending March 2017; 60,000 homes in the year ending March 2018; 645,000 units in the year ending March 2019; and 395,000 homes were built in urban areas in the year ending March 2020.
The number of new homes constructed in rural areas stood at 105,000 in the year ending March 2014; 83,000 in the year ending March 2016; 72,000 in the year ending March 2017; 70,000 in the year ending March 2018; 74,000 in the year ending March 2019; and 75,000 in the year ending March 2020.
National Housing Initiative
The government is carrying out over 510,000 housing projects under the so-called affordable housing project entitled National Housing Initiative.
A total of 80 trillion rials ($347 million) have been injected by Bank Maskan, the state agent bank of the housing sector, in the National Housing Initiative, Mahmoud Shayan, the bank’s CEO, said in February.
Noting that financing the housing project is one of the key issues on Bank Maskan’s agenda, the official said, “The bank is tasked with financing 140,000 out of 400,000 residential units that are scheduled to be constructed under the initiative. Qualified applicants are required to open bank accounts with Bank Maskan and make an initial deposit of 400 million rials [$1,740]. The bank will then grant 1 billion rials [$4,340] in financial facilities for the construction of the residential property.”
Registration in National Housing Initiative, which aims to supply a total of 400,000 affordable homes to people, started in November 2019.
President Hassan Rouhani marked the launch and completion of a series of government-backed housing projects via videoconference on Oct. 22.
A total of 11,600 residential units out of 400,000 homes for middle-income households built under the initiative were inaugurated across eight provinces, according to Deputy Minister of Roads and Urban Development Mahmoud Mahmoudzadeh.
The total value of the National Housing Initiative is estimated at 2,400 trillion rials ($10.43 billion), of which 600 trillion rials ($2.6 billion) pertain to the value of land and 1,800 trillion rials ($7.8 billion) to the costs of construction services and materials.
Meanwhile, the Mehr Housing Plan is a large-scale construction scheme launched in 2007 by the previous administration to provide 2.2 million low-income people with housing units through free land and cheap credits.
All residential units built under the government-sponsored plan, except for those in Pardis whose construction started last year, will be delivered to their owners by Aug. 22, prior to the end of the incumbent government’s term.
According to Ahmad Asghari-Mehrabadi, a senior official with the Ministry of Roads and Urban Development, 8,000 homes are under construction in Tehran’s eastern satellite city Pardis.
“Most of these units are in post-construction stage; hopefully, they will be completed in the next three months,” he was quoted as saying by ILNA.
The ministry’s report also shows that since the 1979 Islamic Revolution to the year ending March 2014, the government handed over plots of land for the construction of 2,005,838 housing units to low-income households, people with disabilities and people who receive financial support from national humanitarian organizations. The figure will increase to 2,475,096 homes by the end of the current government’s term in office in August.
The government’s provision of land for improving urban services and infrastructure development increased from 61,546 plots of land in the year ending March 2014 to 71,820 plots now.
The number of licensed engineers increased from 211,817 in the year ending March 2014 to 293,563 now and is expected to reach 318,563 by June.
House-to-household ratio stood at 79% as of the Islamic Revolution which has now increased to 95%.
The number of new towns’ residents was 616,000 at the beginning of President Rouhani’s government. At present, over 1.1 million people live in new towns and the figure is expected to hit 1.85 million by June.
Keeping UP With Rising Demand
Experts estimate that six million housing units are needed to reduce the housing inflation.
Demand for housing units pertains to four main categories, including the need to build residential units to balance the number of housing units relative to the population, new demand as a result of new marriages, housing renovation and reconstruction of housing units in slum areas, Fars News Agency reported.
According to the data from the fiscal 2016-17 census, the number of households stood at 24.19 million and the number of housing units with residents hit 22.83 million homes, which means some of the households are either living together or living in unofficial residential units. This indicates the need for 1.37 million more homes to meet household needs.
Experts believe that the need for housing units is 1 million houses per year, but according to the data reported by the Ministry of Roads and Urban Development, in a six-year period from fiscal 2013-14 to fiscal 2019-20, only 4 million units of the 6 million houses needed were built.
Housing inflation and imbalance of supply and demand have a negative impact on home prices. According to the Statistical Center of Iran, average prices per square meter in the fiscal 2020-21 grew by 82% compared to the year before, Iran Chamber of Commerce, Industries, Mines and Agriculture’s website reported.
The Iranian National Tax Administration aims to reduce the housing inflation and home prices with new taxes on empty properties. Some believe that these housing units can help families with no home, but experts say that on the contrary, these housing units are either luxury and very expensive or located in tourist resorts used during holidays which are expensive.
Every country needs more proper housing units than the number of population and it is estimated that 600,000 units should be built and saved for new demands over the next 10 years.
New marriages also give rise to new housing demand. Therefore, by calculating the number of new marriages over the years, experts estimate the number of homes needed to meet the new demand. According to data released by Statistical Center of Iran, there were 783,000 marriages in the past 10 years on average.
The other factor is the need for renovation and reconstruction of housing units located in slum areas. According to data released by the Roads and Urban Development Ministry, in the fiscal 2013-14, 11.2 million people are living in 76.4 hectares of slum areas, which constitute 21% of the population. Experts estimate that 5 million rundown residential units need to be rebuilt.
There are 3.2 million homes with little or zero resistance to earthquakes and other natural disasters, and about 8 million housing units need renovation or total reconstruction.
Experts conclude from these factors that more that 6 million units need to be built by the fiscal 2026-27 to reduce housing inflation and lower prices.
Latest data published by the Central Bank of Iran show the average price of each square meter of a residential property in Tehran stood at 287.96 million rials (about $1,240) in the second month of the current fiscal year (April 21-May 21).
The rate indicates a surge of 69.7% over last year’s same month, as average prices were registered at 169.72 million rials ($731).
However, home prices in the capital city dropped by 1.8% compared to 293.22 million rials ($1,263) in the first month of the current year.
A total of 3,938 homes were sold in the capital during the month under review, registering an 88.1% increase compared with the preceding month but a 65.2% decrease compared with the same month of the last year.
During the first two months of the current Iranian year that started on March 21, the number of home deals finalized in Tehran totaled 6,032, which shows a 51.9% decline year-on-year.
In the same period, the average price of each square meter of a home in the capital stood at 290.59 million rials ($1,250), signaling a YOY surge of 80.1% compared with the two months 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 units in Tehran and across urban areas increased by 32.6% and 36.3% respectively during the second month of the current Iranian year compared with the corresponding month of the year before.
