Average Apartment Price in Tehran Reaches Approximately 10 Million Tomans per Square Meter

The average price per square meter of residential space in Tehran reached 9 million 780 thousand tomans in December, indicating an approximately 90% increase compared to December of last year. According to the Housing Economy and Planning Office of the Ministry of Roads and Urban Development, the average price per square meter in Tehran did not see significant growth compared to November, with a 1.5% increase over the one-month period. While the average price of residential apartments in the Iranian capital increased in December, the statistics regarding the number of purchase contracts indicate a decrease in transactions in this market. In December of this year, 5,800 purchase contracts for apartments were registered in Tehran, slightly lower than in November. However, comparing the number of signed contracts in December this year to December last year shows a 65.6% decrease in the number of contracts registered over this one-year period. Comparing the situation of the ten months ending in December this year with the same period last year also presents a similar picture to the comparison of December 2018 statistics with December 2017. According to the report from the Housing Economy and Planning Office, the average price of one square meter of apartment in Tehran in December this year reached 7 million 783 thousand tomans, experiencing an approximately 90% increase compared to the same period last year. The report also states that the number of signed contracts in the ten months of 2018 was 91,986, which represents a 31% decrease compared to the contracts registered in the same ten months last year. Despite the government's efforts to stimulate the housing sector, the numbers regarding transactions indicate that planners in the housing and construction sector have not had much success in this area, although the situation of buying and selling housing in other cities of Iran, apart from the capital, varies. A report from the Statistical Center of Iran on economic growth rates in the first half of this year, published recently, showed that the construction sector shrank by a negative 4.5% compared to the first half of last year. However, another statistical report from the Statistical Center of Iran, corresponding to the information on building permits issued by municipalities in Iran in the summer of this year, indicates that the permits issued for construction in Tehran and other urban areas of Iran have increased. According to this report, in the summer of 2018, more than 21 thousand residential units were projected in the permits issued for construction by the Tehran municipality, which was over 7% higher than in the spring of this year. This number also represented a 12% increase compared to the summer of last year. Additionally, municipalities in other urban areas of Iran, excluding Tehran, issued permits this summer for the construction of approximately 95 thousand residential units, which saw a 4.7% increase compared to the spring of this year and about a 15.4% increase compared to the summer of last year. These increases may indicate that in the coming months, the supply of housing in the market may rise, facilitating the attraction of investment to this sector. If this is accompanied by effective demand in the market, it strengthens the likelihood of positive changes in the housing and construction sector. According to the comprehensive housing plan prepared by the Housing and Construction Deputy of the Ministry of Roads and Urban Development, one million residential units should be constructed annually in the country. Meanwhile, according to estimates of building permits, currently about 320 thousand residential units are being produced by the housing sector. On the other hand, the government considers its housing schemes ineffective, a view also confirmed by experts. Recently, Hassan Rouhani, after introducing the new minister, emphasized to the officials of the Ministry of Roads and Urban Development that 'the past delays in the housing sector must be compensated,' although we have not witnessed any significant developments in this area.