26% Decrease in the Number of Building Permits in Spring 2015

The number of building permits issued by municipalities in Iran in the spring of this year decreased by 25.8% compared to last winter, reaching approximately 37,700 permits. According to the report from the Statistical Center of Iran, this number of building permits issued in spring this year experienced a growth of 4.3% compared to the same period last year. The total area of the permits issued for construction in the reported season decreased by 21.3% compared to last winter and faced a 6% decline compared to spring last year. Additionally, the number of residential units projected in the permits issued for construction this spring was over 93,308 units, which is a decrease of 19.2% compared to winter 2014 and about 6.9% compared to the same season last year. Due to the significance of construction data in Tehran, a substantial part of this statistical report is dedicated to the developments in building permit issuance in Tehran. According to the report, in spring 2015, the Tehran municipality issued 2,234 building permits, which is a decrease of about 7.6% compared to winter 2014 and a 36.6% drop compared to the number of permits issued in spring last year. Comparing the total area designated in the permits issued by the Tehran municipality for construction this spring with the previous season (winter 2014) shows an 8.3% decrease, amounting to 3,583 square meters, which is a 23.7% decline compared to the same season last year. The number of residential units projected in the permits issued by the Tehran municipality for construction in spring 2015 was over 20,073 units, which represents a 3.5% increase compared to the previous season, but this figure faced a 42.2% decrease compared to spring last year. Although some statistics from the performance of Iranian municipalities in spring this year show slight growths, most figures in this report indicate a decrease in the number of building permits issued, as well as in the total area and the number of residential units projected in the issued permits. The number of permits issued for construction and the total area considered in these permits are indicators of housing and construction supply in the coming months, and according to the results of this report from the Statistical Center of Iran, it is evident that housing and construction supply will decrease in the coming months. Some studies estimate the share of housing and construction in the Iranian economy to be between 15% and 30%. This share of the Iranian economy, along with the dependence of many industries and services on developments in this sector, has led the government to pay special attention to reviving this area over the past two years, which has not yet yielded satisfactory results. Shahryar Shaghaghi, a housing and construction expert, predicted in an interview with ISNA that the recession in the housing and construction market will continue until the first half of 2016, after which this sector will gradually experience a boom. Ali Tayebnia recently stated in a television program that prices in the housing market have reached their bottom, and if he needed to buy housing himself, he would undoubtedly proceed with the purchase. The decrease in the lending power of banks and the inability of the banking network to provide the necessary resources for housing buyers, as well as the supply of housing outpacing demand, are among the reasons cited for the continued recession in this sector.