Recession in Tehran's housing market; prices increase 112 percent within a year

A new report from the Central Bank of Iran indicates that in May this year, the number of apartment transactions in Tehran reached 12,100 residential units, a decrease of 36.5 percent compared to the same month last year.

The decline in housing transactions comes at a time when the average purchase and sale price of one square meter of residential unit floor area traded through real estate agencies in Tehran was about 127 million rials, an increase of about 12.5 percent compared to April and 112 percent compared to May last year.

Iran's national currency has lost 70 percent of its value since the beginning of last year, and according to official statistics, inflation has risen to over 52 percent point-to-point (May 2019 compared to the same month last year).

But housing statistics show that price growth in this sector has been much higher than in other sectors.

The Central Bank's reference to a 112 percent increase in prices comes while the Statistics Center's report shows that housing price growth in May was only 24.9 percent compared to the same month last year.

This government agency has also assessed the growth of housing rents at the same level, which is consistent with the Central Bank's statistics.

The Central Bank has also estimated that the growth in house rents in May this year was 22.6 percent higher than the same month last year.

Official Iranian statistics are always met with skepticism from experts.

The Central Bank says that the highest growth in housing prices during this period was in District 9 of Tehran (134 percent) and the lowest growth was in District 19 (about 85 percent).

Among the 22 districts of Tehran Municipality, the highest price per square meter of residential infrastructure traded, equivalent to about 260 million rials, belonged to District 1, and the lowest, at about 59 million rials, belonged to District 18. These figures represent an increase of about 107 and 118 percent, respectively, compared to the same month last year.

The number of residential apartment transactions in Tehran in the first two months of 2019 amounted to about 15,600 units, which represents a 35.6 percent decrease compared to the same period the previous year.

Thus, the majority of housing transactions over the past two months have been completed in May.

Source: Radio Farda