Economy, Business And Markets

Tehran Home Sales Rise by 20%

Tehran Home Sales Rise by 20% Tehran Home Sales Rise by 20%

A total of 5,918 housing units were sold in Tehran during the month that ended April 19 (marking a 20.4% growth compared to the same period last year), promising a new and much-awaited opening for the sluggish property market.

The figures raise hope for market recovery after a prolonged and painful recession took a high toll on the key industry and other associated sectors.

Central Bank of Iran’s latest “Trends in Tehran Housing Market” indicates a 4.3% year-on-year rise in home prices in the capital, with one square meter of a housing unit being sold at 39.9 million rials ($1,300) on average during the said period.

According to the report, Tehran’s upscale District One continues to be the most expensive area, with the average price of homes at 84.9 million rials ($2,800) per m2. Houses in District 18, southwest Tehran, recorded the lowest average price– 20.6 million rials ($680) per meter.

The CBI data says that District 5, northwest of the capital, recorded most of the sales, accounting for 14% of housing deals in the first month of the fiscal year that started on March 20, while District 4 in the northeast was second with 9.5% of the total deals.

Housing units built less than five years ago are still in demand in the sprawling capital. Newly-built houses accounted for 52.5% of the total deals. Homes older than 20 years accounted for 7.6% the sales.  

 Holiday Effect

A monthly comparison of data, however, shows a 55% drop in the number of home sales and 7.1 % decline in the average sale prices. But because of the two-week Iranian New Year holiday the decline is not deemed significant.   

A report by Financial Tribune’s sister newspaper, Donya-e-Eqtesad, shows that average home prices dropped by 4.6% in 2015, 3.7% in 2014 and 7.4% in 2013.

“We are not worried because the drop is caused by the annual holidays. Buyers usually start searching for homes from the second month of the fiscal year, (started April 20),” Hessam Oqbaei, head of Tehran Association of Realtors, told ISNA.

Oqbaei added that 8,199 rental agreements were registered during the period, marking a growth of 27% from a year earlier. However, the number of rentals   across the country saw a decline.

Rental rates grew by 9.8% compared with the same period last year. The CBI says the surge is reasonable and “in line with the inflation rate”.