Economy, Business And Markets

15% Upsurge in Tehran H1 Home Deals

15% Upsurge in Tehran H1 Home Deals15% Upsurge in Tehran H1 Home Deals

The total number of home sales in Tehran city reached 83,199 during the first half of the Iranian fiscal year (started March 20), marking a 14.7% growth compared with the same period last year. The average price of residential units reached 41.8 million rials ($1,329) per m2 – an annual growth of 3.7%.

The latest issue of “Trends in Tehran Housing Market” published by the Central Bank of Iran indicates a 10% growth in the total number of sold housing units during the Iranian month to September 21. Average home prices reached 42.7 million rials ($1,357) per meter during the last month of summer, up 2.3% year-on-year.

The latest uptick in home sales and house prices is indication that the recession-hit property market is in recovery mode. Late last month, Hesam Oqbaei, the head of Tehran Association of Realtors said the housing sector has entered its “first phase of recovery” and is on the threshold of a pre-boom trajectory that should eventually lead to an all-out upturn.

On a less upbeat note however, home sales experienced 16.1% drop and 0.06% decline in average prices, compared with the previous month. According to the CBI, in the fifth month of the current year, 17,032 real estate deals were registered in the capital.

CBI data shows that residential units built in the past five years accountrf for more than half of the deals in the said period.

Tehran’s newly-developed District 22 in the northwest, recorded the highest y--y growth in home prices at 12.65%.

The high-end District One in the north part of the city, however, still houses the priciest residential units at an average price of 89.2 million rials ($2,835) per m2.

District Three also on the northern flank, recorded 2.2% drop in home prices during the month to September 21. District 18, in the southwest, is where buyers can find the cheapest houses, with average prices at 21.4 million rials ($680) per meter.

Residential units with 30-35 square meters accounted for 12.5% of total home purchases. About 12.2% of buyers purchased houses with an average price of 25-30 million rials ($795-$950) per m2.

Houses with a tag of 1 to 1.5 billion rials ($31,780 to $47.670) were buyers’ top choices as with these apartments accounting for 13.7% of the home sales.

CBI data also suggest that during the one-month period, rents increased by 9.7% in Tehran and 9.3% in urban areas across the country.

 S&Ls Operational

The CBI also announced the establishment of “Savings and Loan Associations,” a first-time initiative after the 1979 Islamic Revolution aimed at promoting region-specific financing for both homebuyers and builders.

According to the statement published on the CBI website, the minimum capital requirement for launching regional S&Ls is 500 billion rials ($16 million) for Tehran, 350 billion rials ($11.2 million) for other major cities, 250 billion rials for provincial capitals and 100 billion rials ($3.1 million) for small towns.

Earlier this month, the Money and Credit Council, the highest policymaker in financial markets, approved the establishment of the savings and loan associations “with the aim of funding the housing sector by attracting small savings and allocating housing loans as per Act 2 of Article 7 of the law to revive, improve and renovate distressed urban areas earlier ratified by the government.”