Central Bank Report: Recession in the Housing Market Continues

The results of the Central Bank of Iran's report indicate that in the first seven months of this year, the number of residential apartment transactions in Tehran has reached over 84,000 units, experiencing an 18.5% decrease compared to the same period last year. According to this report, the number of residential apartment transactions in Tehran in October of this year also reached 11,500 units, which is an 8.2% decrease compared to the same month last year. In the first seven months of 1394 (Iranian calendar), the average price per square meter of residential property sold through real estate agencies in Tehran amounted to 3,870,000 tomans, reflecting a 1% decrease compared to the same period last year. Additionally, the average price per square meter of residential property sold in Tehran in October 1394 reached 3,930,000 tomans, which is a 0.9% increase compared to the average price per square meter sold in October 1393. The average price per square meter of residential property sold in Tehran in October compared to September also experienced a 0.5% growth. The continued decrease in transactions in Tehran's housing market and the reduction in average prices in the first seven months of this year indicate a persistent recession in this market. According to the results of this Central Bank report, published under the title 'Housing Market Developments in Tehran in October 1394', it is indicated that in the reported month, among the 22 districts of Tehran municipality, the highest average price per square meter of residential property sold was 7,900,000 tomans in district one, while the lowest was 2,080,000 tomans in district 18. The distribution of the number of transactions by different districts of Tehran in October this year also shows that, as in previous months, the highest number of transactions occurred in district five, accounting for 13.2% of total housing transactions in Tehran. Districts four, two, and ten followed in the ranking of the number of transactions. This report highlights the significant decline in the number of transactions and the relative decrease in prices in the housing market, emphasizing that prices in this market are approaching their lowest point, presenting the best opportunity for consumer buyers to enter the housing market. In this report, Central Bank experts also identified the clarification of the results of nuclear negotiations as a factor for 'reducing perceived uncertainties in the macroeconomic environment'. At the end of this report, there is hope that with 'recent decisions made by the Money and Credit Council to facilitate credit in the housing sector and enhance household housing purchases, improvement in housing market transactions in the coming seasons should not be unexpected.' This hope comes at a time when no significant activity has occurred in Tehran's housing market since these decisions were made. In this context, a 26% decrease in the number of building permits in spring 1394 could be 'inflationary'.