TEHRAN – The housing market in Tehran was the second-highest returning market in Iran among the country’s four major markets in the previous Iranian calendar year (ended on March 20) with 85 percent annual growth, ISNA reported.

As reported, the information obtained from Kilid website (which is a major platform for housing trades) indicated that the housing price index in Tehran grew by 85 percent in the previous year compared to its preceding year.

The highest monthly price increase of 12.5 percent occurred in the Iranian calendar month of Mordad (July 22-August 21, 2020), while the biggest monthly price decrease occurred in Azar (November 21-December 20, 2020) with a decline of 8.1 percent.

In the seventh month of the previous Iranian calendar year (September 22-October 21, 2020), the annual housing price index in Tehran grew by 121 percent, which was the highest increase compared to the same month of the preceding year.

Coronavirus has been reported to be a major factor affecting the housing prices in Iran as the pandemic has stoked concerns about losing one’s savings and more people entered the housing market.

“People are turning to the housing market in order to protect their savings in the face of rising inflation. No one sees housing as a short-term consumer commodity. Even real consumers view purchasing a home as a long-term investment,” says Mehdi Soltan-Mohammadi, a housing expert.

The average price of each square meter of residential properties in Tehran increased from 263 million rials (about $6,262) in March 2020 to 530 million rials (about $12,620) in March 2021, which shows a 101 percent increase.

Housing prices in Tehran city also rose 78.9 percent in the eleventh Iranian calendar month (January 20 – February 18), as compared to the same month of the past year, according to the latest report released by the Central Bank of Iran (CBI).

Fardin Yazdani, the planner of the Transport and Urban Development Ministry's Comprehensive Housing Initiative, however, believes that the housing prices in the Iranian market are not going to experience any sudden rise in the coming months and the market will stay stable.

“Given the housing market situation and the trends in other parallel markets, there will be no significant change in the volume of housing transactions in the coming months,” the portal of Tehran Chamber of Commerce, Industries, Mines and Trade (TCCIMA) quoted Yazdani as saying in early March.

The housing market expert further explained that price jumps occur when the rate of price increases in a market exceed the cost increase as well as the inflation rate, so apparently, no price jump is expected in the housing market in near future.

Excessive price increases have left the market with a kind of imbalance between purchasing power and the owner expectations considering the existing prices; therefore, the market has entered a relative recession and this slump in trading is expected to continue, Yazdani said.

He further referred to the liquidity growth and its impact on the housing market and said: "The liquidity growth will ultimately have its negative impacts on the asset market in the long run; as all the statistical data of the last two decades show, one of the most important and influential factors on the housing market has been the liquidity growth, which unfortunately continues to increase.”

According to Parvaneh Aslani, director-general of Housing Economy Office of the Transport and Urban Development Ministry, home prices have registered a 200 percent growth over the past five years.

EF/MA