Housing price in Tehran rises 10% in a month

October 28, 2020 - 12:13

TEHRAN- Housing price in Tehran city has risen 10 percent in the seventh Iranian calendar month (September 22-October 21), from its previous month, according to the latest report released by the Central Bank of Iran (CBI).

The CBI’s report put the average price for one square meter of a residential unit at 267.2 million rials (about $6,361) in the capital city in the seventh month of this year, up 110 percent from the figure for the same month in the past year.

Meanwhile, the number of real estate deals has risen 2.3 percent in Tehran in the seventh month of this year compared to the sixth month, while rising 154.5 percent compared to the same month of the past year.

Last month, a member of the Iranian Parliament (Majlis) Civil Committee said that the drastic and unprecedented rise in housing prices in recent months is going to lead the housing market to a recession in the coming months.

“With the dramatic and unprecedented rise in housing prices, the market is expected to enter a recession for at least three to four years in the coming months, but naturally, as the recession intensifies, housing prices will fall by about 10 to 20 percent”, Mojtaba Yousefi stated.

Unfortunately, housing prices have risen by about 200 percent in recent months, and this has created many problems for real house buyers, he lamented.

“The main problem is that in such a market real buyers cannot afford to buy houses and instead the market has become a playground for brokers and speculators.”

According to the official, the housing market trend in Iran has been sinusoidal, meaning that housing prices have risen over a period of time and then the market has entered a recession, however, in the last two years the trend has become contrary to the previous years and the housing prices have been constantly increasing.

Last week, President Hassan Rouhani launched and inaugurated the projects for the construction of nearly 11,000 residential units throughout the country via video conference.

The executive operation for the construction of 8,896 units under the National Housing Action Plan was started in some provinces, while 1,959 units under the Mehr Housing Plan were inaugurated in the southern Fars province, in an online ceremony attended also by Transport and Urban Development Minister Mohammad Eslami.

Back in August 2019, Rouhani had officially launched the government’s National Housing Action Plan, by inaugurating a project for constructing 110,000 affordable housing units across the country.

The National Housing Action Plan aims to construct 400,000 small and medium-size apartments (70-100 square meters in size) across the country and particularly in Tehran, where housing prices have risen most sharply.

Nearly half of the total number of the said homes will be constructed in Tehran’s suburban “new towns” such as Parand and Pardis, respectively located in the west and east of the city.

According to the transport and urban development minister, the government plans to complete the new units by April 2021.

While the ministry will provide the land for the new developments, it will only supervise construction, enlisting private sector construction firms who will bid for contracts that entitle them to receive state loans and subsidized building materials. 

The government’s investment in construction will help create new jobs across the country and is expected to boost wages among laborers.

Providing housing to low-income families could also help alleviate economic hardship, especially if the government’s assistance can help inflation-hit renters become homeowners.

MA/MA

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