Average Housing Price Exceeds 83 Million Tomans; Decline in Tehran's Real Estate Transactions

The Central Bank in its latest report stated that the average housing price in Tehran has reached over 83 million tomans, and the website 'Nin Economic' reported a 60% decline in transactions in this sector in 2023. According to Iranian media, the housing price in Tehran, based on the latest official data released on March 18 of the previous year by the Statistical Center of Iran, has reached 83 million and 312 thousand tomans per square meter. Reports indicate that the average price of homes in Tehran has increased by exactly 16 million and 872 thousand tomans after nearly a year. This event, according to some experts, indicates a continuation of the upward trend in prices in the market, which could lead to a further decline in housing transactions. According to this media report, based on data from the Central Bank of the Islamic Republic, the transactions in the first 11 months of 2023 represent the lowest amount of housing transactions since 2016 and even before that. Additionally, comparing the statistics of 2023 with housing transaction statistics from 2017 shows a 75% decrease in this regard. This decline in transactions is expected to continue, according to industry activists. In this context, the head of the Tehran Real Estate Agents Union stated that the housing sector is influenced by many factors such as government financial policies, inflation, currency rates, etc., and from a macro perspective, what happens in the new year is largely dependent on government behaviors and policies. Kianoush Goudarzi told the 'Hamshahri' newspaper that with the increase in the dollar price from 50 thousand tomans towards 60 thousand tomans, sellers who were looking for customers and were offering discounts to attract buyers have withdrawn from selling and raised their asking prices by 20% to see what will happen in 2024. Hossein Rostami, the head of the Mashhad Real Estate Agents Union, also stated on April 8 that 'the government and the private sector must reduce the gap between supply and demand so that perhaps a transformation in the housing market can occur and this year there will not be a recession in the housing market.' A review of developments in the housing market in Iran shows that the decrease in people's purchasing power is the most important factor hindering applicants from obtaining housing. Last summer, the Research Center of the Parliament reported that the first to third income deciles are 'absolutely' unable to secure the housing they need, while the fourth and fifth deciles and even part of the sixth decile are 'relatively' unable to do so. Ebrahim Raisi, during the election campaign and after entering the presidency, promised to build one million housing units per year, but more than two years into his administration, there have been no achievements in this area. Housing remains out of reach; rental inflation is leading. Dizziness in the housing market has halted transactions due to the 60 thousand toman dollar. Housing consumes half of the expenses of Tehranian households. The head of the Parliament's Civil Commission: Chinese investors will enter the Iranian housing market from May 2024.