EghtesadOnline: Home prices in Tehran increased, as the number of property deals declined in the seventh month of the current Iranian year (ended Oct. 22).
According to the Central Bank of Iran's latest report, the trend of surging prices coupled with falling property deals in the capital has continued for the fifth month in a row.
CBI believes that this reinforces the possibility of a nationwide housing recession in the foreseeable future since Tehran accounts for two-thirds to half of all property deals in Iran.
New data published by the CBI on its official news website on Saturday indicate that only 9,357 home deals were concluded in the capital during the period, signaling a year-on-year decrease of 32.3% compared with 13,815 deals in the corresponding period of last year. Furthermore, the number of property deals declined by 9.5% compared to the preceding month, according to Financial Tribune.
The average price of each square meter of a residential unit in Tehran stood at about 86.1 million rials ($619) during the seventh month, showing an annual surge of 83.5%, as average prices were registered at 46.92 million rials ($337) last year.
Home prices in the capital grew by 6.4% compared to 80.95 million rials ($582) in the sixth month of the current year.
The trend of rising prices, alongside the falling number of deals in Tehran, emerged from the third month of the current year that ended on June 21 when prices grew by 45.8% and deals fell by 3.1% on an annual basis respectively. It has only exacerbated in the following months.
Details of Property Deals
During the seventh month, residential units built up to five years ago grabbed the highest share of the total 9,357 deals with 44.5%, down by 1.7% compared with the same month of last year.
The lost share was added to units 16 to 20 years old, which registered a 14.9% share of total deals, but still trailed behind units ranging from six to 10 years with a share of 15.7%. Homes that were 11 to 15 years old posted a share of 14.6% of total deals while those higher than 20 years had the lowest share of 10.3% of total deals.
The distribution of the dealt properties shows that among Tehran's 22 districts, District 5 once again grabbed the highest share of total deals at 15.8%. It was followed by districts 2 and 4 with respective shares of 9.7% and 8.8%.
In all, 10 districts grabbed the lion's share of the deals at 74% with the remaining 12 districts holding a 26% share.
Once again, District 5 registered the highest average annual price growth of a whopping 104.6% during the seventh month of the current year. This is while District 12 saw the lowest year-on-year average price hike at 41.4%.
Among Tehran's 22 districts, the northernmost affluent District 1 again registered the highest average home price of 187.7 million rials ($1,350) per square meter. District 18 was the capital's cheapest with an average per-square meter price of 36.1 million rials ($259). These figures show a respective increase of 82.9% and 58.9%.
CBI figures show that Tehran's residents once again favored smaller and cheaper homes, as their purchasing power has significantly dwindled in recent months due to the steep price hikes.
Relatively cheap residential units with an average price range of 60 million rials ($431) to 70 million rials ($503) per square meter were the most popular in Tehran during the seventh month and grabbed a 9.7% share of all deals. They were followed by units priced at 50 million rials ($359) to 60 million rials ($431) and 40 million rials ($287) to 50 million rials ($359) per square meter with a respective share of 9.4% and 9.1%.
From the total number of deals, 54.2% belonged to homes cheaper than the average per-square meter price of the city.
Residential units with an area of 50-60 square meters registered the highest number of deals with a 14.6% share of total deals. Units with an area of 60-70 square meters and 70-80 square meters came second and third with shares of 14.5% and 11.5% respectively.
On the whole, units with an area of less than 80 square meters had a 53.2% share of total deals.
CBI data further show that Tehran's homes worth between 1.5 billion rials ($10,791) to 3 billion rials ($21,582) were the most popular with a 17.8% share of total deals. Homes with price tags of between 3 billion ($21,582) rials to 4.5 billion rials ($32,374) and between 4.5 billion rials ($32,374) to 6 billion rials ($43,165) came next with a respective share of 16% and 11.2% of total deals.
Collectively, residential units valued at less than 6 billion rials ($43,165) had a 48.4% share of total home deals in Tehran during the seventh month of the current year.
During the seven months of the current year, the number of home deals finalized in Tehran totaled 84,251, 14.9% less compared to last year's corresponding period.
In the same period, the average price of each square meter of a home in the capital stood at about 70.1 million rials ($504), signaling a year-on-year surge of 55.4% compared to the seven months of last year.