Economy, Business And Markets

Improvement Expected in Property Market

Improvement Expected in Property Market Improvement Expected in Property Market

The Central Bank of Iran has forecast upliftment of the property market in the current calendar year (started March 20),   despite the rather gloomy data that marked the previous year. Pointing to stimulus plans to lift the demand and supply sides of the market in the next 12 months, the CBI hopes the measures, which largely include discounted mortgages, will make a difference in the key housing sector.  

The Money and Credit Council-a decision-making body agreed in March to double the ceiling of Bank Maskan’s Housing Saving Account mortgage for newlyweds, raising it to 1.6 billion rials ($52,900) from the previous 800 million rials in Tehran.

CBI's "Trends in Tehran Real Estate Market" for Feb.20-March 19 published on the bank's website, shows that 13,139 home deals were registered during the period, indicating an 8.5% drop year-on-year. Housing units built less than five years ago accounted for 55.8% of total deals.  

According to the report, a total of 154,700 home deals were made during the last fiscal year indicating a decline of 10.3% compared to the previous year.

The report, however, shows stability in property prices during the year, as the average price of a housing unit stood at 38.9 million ($1,285) rials per m2, 0.8% less than the average price the year before.

It is also reported that the average price of a housing unit, during the one-month period stood at 42.1 million rials ($1,390) per m2, growing by 7.5% month-on-month and 3.9% at an annualized rate.

The report details the frequency of housing deals based on prices, with homes below the average price (42.1 million rials per m2)  accounting for 61.2% of the total deals in the last month of the fiscal year. Homes priced between 25-35 million rials, were the most appealing for homebuyers, accounting for 13% of the home deals in the capital.

On the other hand, rents increased by 9.8% month-on-month and 11.1% at an annualized rate between Feb.20-March 19. Referring to the government’s disinflationary policies, the central bank subscribes to the view that the surge in rentals is in line with the inflation rate.

Caption: CBI measures to boost the housing sector largely include discounted mortgages.