Tehran Home Sales Up 21 Percent

Home sales in Tehran totaled 12,400 during the eight month of the fiscal year (Aban) to October 21, marking 21% growth compared with the previous month.  The deals registered a 4.1% growth year-on-year.

Central Bank of Iran reviewed real estate performance during the eighth month in the latest issue of “Trends in Tehran Housing Market.” The report indicates that prices grew by 0.1% and 7.3% compared with the previous month and the same period last year, respectively.

Although the property market – in recession since 2013– has not yet shown signs of decent recovery, housing officials and experts maintain that the key sector is in a “pre-boom” state seen in the gradually increase in sales and prices.

The average price of residential units in the sprawling capital was 44.1 million rials ($1,375) per m2 during the second month of autumn. According to the numbers, 61.7% of the deals were closed at prices lower than the monthly average. Housing units with an average price of 30 million-35 million rials accounted for 12.6% of the total deals.

Realtors in Tehran registered 106,100 deals since the beginning of the fiscal year in March, recording a 10.6% growth year-on-year.

Newly-built homes (built less than five years ago) accounted for 52% of the total deals, a drop of 3.5% compared with the same period last year. Houses 16-20 years old accounted for 8.5% of the total sales, marking 20% growth y/y.

Homes smaller than 80 square meters accounted for 53.4% of the total deals suggesting the unpopularity of larger apartments at a time when the buyer’s purchasing power has visibly diminished. About 38% of houses were sold for a total price of 1 billion to 2.5 billion rials during the period.

  Sales By District

Realtors operating in Tehran’s District Five, in the northwest had a busier time than their peers in other neighborhoods, as the district solely accounted for 16.8% of home purchases during the one-month period. Districts four and two had 11.6% and 9.3% share of the total deals respectively.

The upscale District One continues to be home to the highest pricies. Houses were sold for 97.9 million rials per m2 on average, lower than the previous month’s 106 million rials. District 18 in the southwest had the lowest average prices during the said period at  21.4 million rials per m2.

During the eighth month rents in Tehran city grew by 10.6% compared with the month before. The figure recorded 9.3% growth in other urban areas across the country.

The central bank believes that the steady growth in home prices in recent months (still lower than the rate of inflation), and the cut in the mortgage rate of Bank Maskan – the main housing bank–has had a positive impact on the market and the people’s purchasing power.

Bank Maskan recently lowered the lending rate for the Housing Savings Account mortgages to 9.5%. Loans are offered at 8% for housing units located in distressed urban areas.

A scheme devised to promote home ownership for first-time buyers, the Housing Savings Account requires applicants to make an initial deposit and wait for a year to be eligible for the mortgage.

In Tehran and other big and small cities, the amount of loans has been set at 800, 600 and 400 million rials respectively ($25,600, $19,200 and $12,800). Moreover, new couples applying for the loans will each be eligible for 800 million rials or a total of 1.6 billion rials ($51,200).