Tehran Housing Recession Deepens as Prices Rise

Home prices in Tehran increased and property deals declined in the ninth month of the current Iranian year, Azar (ended Dec. 21), the Central Bank of Iran said.

Latest data published by CBI on its website indicate that only 6,814 homes were sold in the capital during the period, signaling a year-on-year decrease of 61.7% compared with ۱۷,۷۷۶ deals of the corresponding month of last year.

Furthermore, the number of property deals declined by 0.6% compared to the preceding month, Aban.

The average price of each square meter of a residential unit in Tehran stood at about 95.5 million rials ($۸۵۲) during the ninth month, showing an annual surge of 91.8%. Prices averaged 49.82 million rials ($444) last year, according to Financial Tribune.

Home prices in the capital grew by 4.1% compared to 91.7 million rials ($818) in the eighth month of the current year.

The trend of rising prices, in tandem with the falling number of deals, in Tehran has emerged from the third month of the current year (ended June 21), when prices grew by 45.8% and deals fell by 3.1% on an annual basis respectively. It has only exacerbated in subsequent months.

Details of Property Deals

During the ninth month of the current year, residential units up to five years old grabbed the highest share of the total of 6,814 deals at 43.4%, down by 5.4% compared with the same month of last year.

That lost share was added to units built six to 10 years ago and those between 16 and 20 years, registering a 16.1% and 15.4% share of total deals.

The share of dealings for homes above 20 years has also improved to reach from 9.8% of the total deals last year to 11.2% this year, but they still had the smallest share of total deals in Azar. Homes that were 11 to 15 years old posted a share of 13.9% of total deals.

The distribution of the dealt properties shows that among Tehran’s 22 districts, District 5 once again grabbed the highest share of total deals at 14.3%. It was followed by districts ۲ and 4 with respective shares of 9.2% and 8.3%.

All-in-all, 10 districts (one, two, four, five, seven, eight, 10, 11, 14 and 15)) grabbed the lion’s share of the deals at 73% with the remaining 12 districts holding a 27% share.

District 1 registered the highest average annual price growth at a whopping 105% during the ninth month of the current year. District 12 saw the lowest year-on-year average price hike at 54.6%.

Among Tehran’s 22 districts, the northernmost affluent District 1 again registered the highest average home prices at 218.1 million rials ($1,947) per square meter. This is while District 18 was the capital city’s cheapest with average per square meter prices standing at 42 million rials ($375). These figures show a respective increase of 105% and 75% YOY.

CBI figures show that Tehran residents once again favored smaller and cheaper homes, as their purchasing power has significantly dwindled in recent months due to massive price hikes.

Relatively cheap residential units with an average price range of 50 million rials ($446) to 60 million rials ($536) per square meter were the most popular in Tehran during the ninth month, as they grabbed a 9.8% share of all deals. They were followed by units priced at 60 million rials to 70 million rials ($625) and 40 million rials ($357) to 50 million rials ($446) per square meter with a respective share of 9% and 8.9%.