A new report by Iran Chamber of Cooperatives shows the Purchasing Managers’ Index for Iran’s housing sector has dropped to a 16-month low.
The Purchasing Managers’ Index for the housing sector in the fourth month of the current Iranian year (July 23-Aug. 22) settled at 38.57 from 54.87 of the preceding month (June 22-July 22), indicating a 29.7% monthly decrease.
PMI is an indicator of the health of economic sectors. It provides information about current business conditions to decision-makers, analysts and purchasing managers.
Raw material inventory, employment conditions, new orders, supplier deliveries and export/production conditions were among the criteria quizzed, 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 booming or stagnating respectively.
The survey includes 12 questions about business conditions 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" sub-index stood at 40.35 in the month ending Aug. 22, indicating a 12.74% decline compared with 46.24 in the month ending July 22.
The "supplier deliveries" sub-index, which measures how fast deliveries are made, plummeted by 13.58% from 50 in the month ending July 22 to 43.21 in the month ending Aug. 22.
The "raw materials (construction materials) inventory" sub-index slid 20.95% from 50.6 in the month ending July 22 to 40 in the month under review.
The "employment" sub-index fell 4.3% from 50 in the month ending July 22 to 47.85 during the period.
To calculate housing PMI, seven secondary criteria were also surveyed by ICC, including "raw materials purchase prices", which stood at 89.63 in the month ending July 22. The sub-index declined by 6.36% to stand at 83.93 during the period.
"Warehouse inventory" increased 0.53% to reach 45.36 in the fifth Iranian month from 45.12 in the fourth month.
The "exports" sub-index settled at 47.14 in the month from 50 in the month ending July 22, registering a 5.72% decrease.
"Prices of products or services" grew 3.34% to stand at 68.9 in the month ending Aug. 22 from 66.67 in the month ending July 22.
"Fuel consumption" dropped 5.88% from 54.26 in the fourth Iranian month to 51.07 in the fifth month.
"Sales" declined 9.88% from 47.56 in the fourth month to 42.86 in the fifth month.
And, the "performance expectations for the following month" sub-index settled at 37.86 in the month ending Aug. 22 from 53.65 in the month ending July 22, showing a 29.43% decline.
CBI Report on Tehran’s Housing Market
Latest data published by the Central Bank of Iran show a total of 5,500 homes were sold in Tehran during the fifth month of the current fiscal year (June 22-Aug. 22), registering an increase of 8.4% compared with the preceding month but a 39.4% decrease compared with the same month of last year.
This is the fourth consecutive month of rising sales.
The CBI data also indicate that the average price of each square meter of a residential property in Tehran stood at 309.7 million rials ($1,147) during the month under review, showing a surge of 34% over last year’s same month as average prices were registered at 231.07 million rials ($855) then.
Home prices in the capital city grew by 3.1% compared to 300.45 million rials ($1,112) in the fourth month of the current year.
The CBI data also show that during the month ending Aug. 22, newly-built residential properties up to five years old constituted the highest proportion of deals at 32.2% (or 1,825 deals), down by 5.3 percentage points compared with the same month of last year.
The lost share was added to homes with a lifespan of six to 10 years, 11 to 15 years, 16 to 20 years and above 20 years. They accounted for 22.4%, 14.9%, 17.8% and 11.8% of total deals compared with the same month of last year’s 18.3%, 13%, 17% and 13.3%, respectively.
The distribution of dealt properties shows that among Tehran’s 22 districts, District 5 grabbed the highest share of total deals at 16.1%. It was followed by districts 10 and two with a share of 10.8% and 8.8%, respectively.
All-in-all, 10 districts (five, 10, two, four, 14, one, seven, eight, 15 and 11) grabbed the lion's share of the deals at 73.2% with the remaining 12 districts holding a 26.8% share.
District 1 registered the highest average home price of 645.6 million rials ($2,391) per square meter. District 18 offered the capital city's cheapest homes with an average per-square meter price of 144.1 million rials ($533). The aforesaid numbers show a respective increase of 22.2% and 47.8% YOY.
Residential units with an average price range of 150 million rials ($555) to 200 million rials ($740) per square meter were the most popular in Tehran during the Iranian month under review, as they accounted for 17.2% of all deals. They were followed by units priced at 200 million rials to 250 million rials ($925) per square meter with a share of 15.9% and homes priced at 250 million rials to 300 million rials ($1,111) per square meter with a share of 12.7%.
From the total number of deals, 59.4% belonged to homes cheaper than the average per-square meter price of the city (i.e., 309 million rials).
Residential units with a floor area of 50-60 square meters registered the highest number of sales with a 14.9% share of total deals.
Units with an area of 60-70 and 70-80 square meters ranked lower with a respective share of 14.2% and 12.7%. All-in-all, residential properties with an area of less than 80 square meters had a 57% share of total deals.
CBI data further show that Tehran’s homes worth between 10 billion rials ($37,037) and 15 billion rials ($55,555) were the most popular with an 18.3% share of total deals. These were followed by homes with a price tag of between 5 billion rials ($18,518) and 10 billion rials and those priced at between 15 billion rials and 20 billion rials ($74,074) with a respective share of 17.7% and 12.7% of total deals.
Collectively, homes valued under 20 billion rials had a 50.6% share of total home deals in Tehran during the fourth month of the current 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 37.8% and 41.2% respectively during the fifth month of the current Iranian year compared with the corresponding month of last year.
