Economy, Business And Markets

Property Market Showing Positive Signs

Property Market Showing Positive Signs  Property Market Showing Positive Signs

The housing market in Tehran is slowly waking up from a long slumber and entering "pre-boom levels" as the total number of home deals in the ninth month of the fiscal year (Dec. 22, 2015- Jan. 20, 2016) reached 15,845, marking a 30% growth compared to the previous month and a 10% year-on-year growth, the  Persian-language daily Donya-e-Eqtesad  reported on Monday.

Property sales during the period mark a 19-month high both in the number of units sold and the market's monthly growth. Home deals in Tehran have been on a steady decline since March 2014 with an average of hardly 10,000-11,000 deals per month.

The market had recorded such upbeat results, seen in the past month, only once between May 21-June 22, 2014 when the housing boon started in 2013.

It seems that both demand and supply in the market are responding rather favorably to the government’s non-inflationary stimulus programs, as the average price of a housing unit in Tehran has risen slightly to 40 billion rials ($1,325) per square meter from 38.8 million rials ($1,285) the month before.

Bank Maskan raised its mortgage ceiling on December 22, which along with the issuance of housing bonds seem to have given the stagnant market the much-needed push. The loans are part of the newly-launched Housing Premium Fund to provide homebuyers with additional loans of 400-600 million rials ($13,200-$19,900) based on the areas where they dwell without having to make deposits. New loans are offered as a supplement to Maskan’s usual mortgages for buying or building housing units. The latest data shows that 91,000 people applied for the new scheme since it was launched.

Based on the data from the Ministry of Roads and Urban Development, the market has improved compared to previous months although the recession is yet to be over. Donya-e- Eqtesad predicts "a boom by the next fiscal year (starts March 20) albeit without a surge in prices simply because of the large number of unsold housing units in the capital."