Housing price in Tehran city falls 2% in a month

June 8, 2021 - 14:27

TEHRAN- Housing price in Tehran city dropped two percent in the second month of the current Iranian calendar year (April 21-May 21), from its previous month, according to the deputy transport and urban development minister.

Mahmoud Mahmoudi although said, “Following the analysis of prices in different areas of the capital, we see that in some areas of Tehran, we had a 16-percent reduction in prices last month.”

Mentioning the three-percent fall in the housing price in Tehran city in the first month of the present year, the official stated, “The price analysis in the first month of this year also indicates the increase of prices in five districts of Tehran and the decrease of prices in 17 districts of the capital, which was repeated in the second month.”

He predicted that if the dealers could be pushed out of the housing market while balancing supply and demand in the current executive plans, housing prices would fall and stabilize.

The housing market reacts to the negative and positive movement of rival markets and is not an independent market that can be definitively commented on, the official noted.

He further explained that the implementation of housing policies in recent years, such as mass production of housing through the National Housing Plan and Mehr Housing Plan, as well as registration in the real estate system, besides the identification of vacant homes and the government's determination to collect taxes from vacant homes have helped reduce keeping of capital in the housing sector, and if the parallel markets do not face a price shock, the direction of the market is towards price reduction and price stability.

The housing market in Tehran was the second-highest returning market in Iran among the country’s four major markets in the previous Iranian calendar year (ended on March 20) with 85 percent annual growth.

The information obtained from Kilid website (which is a major platform for housing trades) indicated that the housing price index in Tehran grew by 85 percent in the previous year compared to its preceding year.

The highest monthly price increase of 12.5 percent occurred in the Iranian calendar month of Mordad (July 22-August 21, 2020), while the biggest monthly price decrease occurred in Azar (November 21-December 20, 2020) with a decline of 8.1 percent.

In late April, the head of Iran’s Property Advisers Union said housing prices in the country should decrease at least 25 percent in order for people to be able to afford to purchase.

Mostafa Gholi Khosravi noted that the closure of real estate agencies due to the coronavirus pandemic has caused some problems in this market, calling for the re-opening of the agencies in compliance with health protocols.

“The affairs of real estate offices are mostly done through phone and social distancing and health protocols are observed when the parties meet for signing contracts. So, these offices which have been constantly closed since the beginning of the current [Iranian calendar] year (March 21) should be re-opened,” Khosravi said.

The official also stressed the need for establishing a market regulation headquarters for housing sector to monitor the activities of dealers and real estate agencies in order to balance the prices.

Housing prices in Iran have been constantly rising over the past year due to various internal and external factors.

Coronavirus has been reported to be a major factor affecting the housing prices in Iran as the pandemic has stoked concerns about losing one’s savings and more people entered the housing market.

“People are turning to the housing market in order to protect their savings in the face of rising inflation. No one sees housing as a short-term consumer commodity. Even real consumers view purchasing a home as a long-term investment,” Mehdi Soltan-Mohammadi, a housing expert, said.

MA/MA

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