Economy, Business And Markets

Tehran Home Sales Up 30%

Tehran Home Sales Up 30%Tehran Home Sales Up 30%

Some 17,032 houses were sold in Tehran during the month ending August 21, marking a year-on-year growth of 30.1%, continuing a bullish trend that could herald a recovery for the depressed property market.  

Home sales spiked 13.8% compared with the previous month.  

According to Central Bank of Iran’s latest report on “Monthly Trends in Tehran Housing Market” for the fifth month of the Iranian year, the average price of houses in Tehran stood at 42.7 million rials ($1,370 at market exchange rate) per square meters, indicating a 7.6% and 1.2% growth compared with the same period of last year and the prior month, respectively.

District 1, located in northern Tehran, is still home to the priciest residential units, with buyers paying an average of 91.4 million rials for buying a square meter of houses in the upscale area.

CBI’s data also indicate that District 1 recorded the highest growth in house value, up by 17% year-on-year.

District 18 in Tehran’s southwest had the cheapest homes at 21.8 million rials per square meter. District 5, located in the west of the capital, accounted for the highest share of purchases during the period, with 16.2% of total home deals taking place in that area.

Newly-built houses accounted for 51.7% of the total deals during the one-month period whereas housing units older than 16 years accounted for 15% of the total sales, registering a 39% rise.

Buyers mostly preferred homes with an area of 70-80 square meters, priced at 30-35 million rials per square meter. Residential units with a price of 1.5-2.5 billion rials ($48,000-$80,000) accounted for 27.5% of home sales during the period.

 Five-Month Performance

CBI’s report also shows that the total number of home sales in Tehran reached 68,912 during March 20–August 20, up by 15.5% compared with the same period of last year.

The housing market has been in recession since November 2013, but recent figures point to an uptick in both prices and home sales, stirring hope that a recovery is within reach.  

 Surge in Mortgages

The positive figures come after a surge in Bank Maskan’s paid mortgages and recent cuts in the bank’s lending rate from 14% to 11%. Maskan is the government-owned lender specialized in financing the housing sector.

Minister of Roads and Urban Development Abbas Akhoundi on Thursday reported an 89% growth in Bank Maskan’s total paid mortgages.

“We lifted housing loans’ cap from 200 million rials ($6,400) to 1.6 billion ($51,600) rials [for couples]. About 65,000 households applied for the loans, which amount to 13 trillion rials ($418.4 million),” he said.

“The government is seeking to promote a culture of saving, which would turn to a considerable capital for the government on the macro scale.”

Bank Maskan’s Housing Saving Accounts provide buyers in Tehran with 800 million rials ($25,800) while those in urban areas other than Tehran can qualify for 600 million rials. Those in towns with a population of less than 200,000 can receive 400 million rials.

Applicants would be eligible to take out loans after maintaining a deposit in the banks for six months.

According to CBI’s data, banks paid 105.3 trillion rials ($3.4 billion) to the housing and construction sector during the month ending on August 20, 40% of which were in the form of mortgages.

Home renovation loans accounted for 10.8% of all the loans allocated to the housing sector.