$250b Trapped in Vacant Homes

While the total number of houses surpasses the number of Iranian households, millions of dollars are trapped in the form of empty residential units, the minister of roads and urban development said.

“There are a total of 25.4 million houses and 21.5 million households in Iran, which shows that for the first time, the number of houses is more than the number of households,” Abbas Akhoundi was also quoted as saying by ILNA.

The number of empty residential units has also been sharply on the rise and the minister, citing official statistics from the previous fiscal year ending March 20, added that currently the country has some 2.58 million empty homes, 490,000 of which are in the capital Tehran.

“These empty homes are worth $250 billion while all the companies currently listed on the stock market are worth $110 billion, meaning that we have twice the total worth of our equity market locked in empty homes,” he added.

He said wisdom demands that this problem is addressed while increasing the number of residential units under these circumstances would “only be for show”.  He added that “house construction has been on the rise, although we have 19 million people living on city margins in difficult circumstances”.

The minister further said there were 630,000 empty residential units in the country in 2006, which soared to 1.66 million in 2011 and reached the current 2.58 million. This is “in stark contrast to Resistance Economy” principles set out by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei and “is considered an utter waste of national resources”.

Akhoundi pointed out that during 2010-12, building approvals were issued for 670,000 residential units, meaning that no one person should currently be without a roof over their head in the capital.

These permits equal one-fourth of all households in Tehran, “which trend, if it were to continue for another12 years, would mean that we would face another Tehran”, he said.

However, the minister noted that these constructions have had no meaningful impact on the living conditions of people in the city because more than half of them were undertaken in high-end districts such as districts 1 to 5, “indicating that this volume of construction has been for profit and not to meet demand”.

Akhoundi referred to comments by housing pundits who say the sector has recovered from recession and said, “I believe this boom will not cause price hikes to exceed the inflation rate”.