EghtesadOnline: The average house price in Tehran reached 45.6 million rials ($1,216) per square meter, marking a year-on-year increase of 5.4% during the month to June 21.
The price hike came as the number of home sales declined by 0.8% compared with the correspondent period of last year–not surprising given the occasion of the holy month of Ramadan.
According to the latest report of the Central Bank of Iran–the entity in charge of releasing official housing data –during the last month of spring, District 20 in the capital's south side witnessed the highest surge in home prices at 9.6% while the lowest growth occurred in District 12 at 1.1%.
The total number of residential real-estate deals in the Iranian capital city stood at 15,400 during the period, which marked a decline of 0.8% YOY. The decline in the number of deals could be ascribed to the effect of the holy month of Ramadan, which gives rise to sluggishness in the sector, Financial Tribune reported.
Since Tehran's property market is indicative of the sector's situation across the country, it is likely that the number of sales could also have dropped in other provinces.
Despite the fact that new apartments (up to 5 years old) still account for the biggest share of house sales at 46.9%, the trend is seeing a steady decline as older apartments gain in popularity.
As the report indicates, the sale of new apartments shrunk by 4.8% compared with the same month of last year while houses that were 16-20 years old and older than 20 years experienced a surge of 46.2% and 22.4%, respectively.
District 5, located in the city's northwest, recorded the highest number of residential deals during the month, accounting for 16.2% of total deals in the capital. The district has been the area with most sales during the new Iranian year (started March 21), where the average price hovers around 50 million rials ($1,333) per square meter–a tad higher than the city's average of 45.6 million rials ($1,216).
District 4 and 2, which are both among the pricy areas of Tehran, account for 10.9% and 8.9% of the total real-estate deals respectively. The two areas registered the highest number of home sales after District 5.
This is while the trendy District 1,with an average price of 98.9 million rials ($2,637), is the most expensive area while on the opposite side of the city in southern parts–which includes District 18 (the cheapest neighborhood)–the average home price hovers around 22.9 million rials ($610.6) per square meter. Prices in districts 1 and 18 grew by 2% and 8%, respectively.
In the first season of the new Iranian year, the average price of homes in Tehran and the number of sales respectively increased by 4.9% and 1% YOY. If the growth in prices causes a boom in the beleaguered sector, the country's economy could pick up as the key sector supports more than 300 subsectors.
During the month to June 21, residential units priced lower than the city's average accounted for almost 65% of the deals while apartments smaller than 80 square meters proved to be the choice of most buyers as they constituted 62% of the entire housing deals in Tehran.
So the majority of people are more interested in cheaper and smaller apartments, as their purchasing power has weakened in the face of record rise in home prices between 2005 and 2012.
Prices of more than 50% of the sold residential units in Tehran were under 3 billion rials ($80,000) during the month ending June 21. However, houses that were more expensive than 12 billion rials ($320,000) still accounted for 5.2% of the total housing deals.
According to housing officials, the sector is entering a boom phase during the first half of the current year and prices are forecast to go up by 15%.
President Hassan Rouhani recently weighed in on the housing market and said, "We are not facing recession in our economy other than in the housing sector," announcing a new 100-day plan for the key sector.