42% Decrease in Building Permit Issuance in Iran in 2014

The Statistical Center of Iran has released a report detailing the building permits issued by municipalities in Iran during the year 2014. According to the results of this report, the number of permits issued for construction in 2014 decreased by 41.7% compared to 2013. The report indicates that the total area designated in the building permits issued by Iranian municipalities in 2014 also experienced a 49.4% decrease compared to the previous year. The relative frequency of building permits issued in various provinces of Iran shows that Tehran province, with 15,643 permits issued, accounted for 13% of all building permits issued last year, ranking first among Iranian provinces. Semnan province, with only 1,085 permits issued or less than 1% of the total, had the smallest share. According to information obtained from the Tehran municipality, in 2014, the municipality issued 10,185 building permits, of which 99.5% were for new construction and 0.5% for building expansions. Notably, the number of building permits issued in Tehran decreased by 52.3% in 2014 compared to the previous year. The total area designated in the building permits issued by the Tehran municipality also faced a 52.6% decrease compared to the previous year. These figures may indicate a continuation of the recession in Iran's construction sector during 2014 and a decrease in the supply of buildings in the coming months. The government and the Central Bank have been designing programs in recent months, including increasing the ceiling for housing loans, breaking the monopoly of the Housing Bank in providing loans in this sector, and formulating a plan to provide 80 million Toman loans to first-time homebuyers in Tehran, aiming to revive this sector. However, these statistics do not confirm the success of these policies. Recently, the Central Bank also reported that the number of transactions in Tehran's housing market in the first five months of this year decreased by about 21% (20.9%) compared to the same period last year. According to this statistical report, in the first five months of 2015, the average price per square meter of residential space in Tehran reached 3,846,000 Toman, which is a 1.2% decrease compared to the average price in the same period of 2014. However, the report specifies that in August 2015, the volume of residential transactions in Tehran increased by 3.2% compared to August of the previous year. This growth in the volume of residential sales in August 2015 compared to the previous month, July 2015, was 11.6%. The Central Bank described this growth in residential transactions in August as an 'improvement in performance' and linked it to 'the reduction of uncertainties in the macroeconomic environment due to the openings in international interactions and recent decisions by the Monetary and Credit Council to facilitate credit in the housing sector and enhance household purchasing power.' A Central Bank analyst at the end of the report did not consider the 'continuation of improvement in the housing market transactions' in the coming months to be 'unexpected.'