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Tehran Property Sales Climb 8.2%
Economy, Business And Markets

Tehran Property Sales Climb 8.2%

 total of 15,431 homes were sold in Tehran during the month that ended on May 20, which was a y/y increase of 8.2%. It is seen as a sign that the property market is slowly but steadily awaking from the long slumber that saw home sales drop to historic lows.   

The average price of residential units reached 40.1 million rials ($1,300) per m2, up by 2.8% compared to the same period last year.

Central Bank of Iran report on “Trends in Tehran Housing Market” for the second month of the financial year shows that homebuyers mostly preferred apartments with an area of 50-80 meters with such homes accounting for 44.5% of the total sales.

The numbers indicate that there is still significant demand for new apartments among Tehran residents because “homes built in and after 2010 accounted for 52% of the total home sales.

Hessam Oqbaei, head of Tehran Association of Realtors, said “a 10% surge in home deals signals a 'pre-boom' for the market.”

The property market will officially be out of the recession when home sales grow by 20%-25%,” ILNA quoted him as saying on Saturday.

Addressing buyers' concerns about the increase in house prices, Oqbaei said: “I think the Urban Development Ministry’s focus on absorbing ‘savings’ for buying houses will help prevent an abrupt upsurge in  prices.”

The so-called Housing Savings Account, launched last June, offers first- time homebuyers loans at 14%.  The scheme requires applicants to make an initial deposit and wait for one full year to become eligible for the mortgage.

“Moreover, the market is simply not capable of handling the upsurge after three years of perpetual stagnant prices.”

Lowering lending rates would help boost the property market, according to the realtor because “housing is (also) an alternative investment option for depositors.”

Trends

House rents grew by 9.7% compared with the same period last year, according to CBI data. The report said rents in urban areas other than the capital jumped by 10.8% y/y.

CBI data also shows District 5, located northwest of the capital, recorded most of the sales, accounting for 15.2% of the transactions in the said period, while District 4 in the northeast came second with 9.5%.

Properties located in District One, which is home to Tehran’s high-end suburbs, were the most expensive, with an average price of 78.3 million rials ($2,560). Units in District 18, southwest of the sprawling capital, registered the lowest average price at 21.4 million rials ($720) per m2.

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