September 06, 2019
The bottom has dropped out of housing sales in Tehran, probably because prices have skyrocketed.
Meanwhile, President Rohani has inaugurated a program to build 400,000 apartments in an effort to alleviate the housing shortage. However, he appeared to be ignoring a July report that said the country has 2.6 million vacant residences—enough to house 10 percent of the nation’s families—that are being withheld in hopes of jacking up prices.
The Ministry of Transport and Urban Development announced that housing sales in the capital for the month of Mordad, which ended August 22, had dropped 74 percent compared to the same month last year.
And it said the price of a square meter of space in properties that were sold was up 78 percent for the month compared to the same month last year.
The average price per square meter this Mordad was 131.87 million rials, or $1,150, assuming a rate of 115,000 rials to the dollar.
Among Tehran’s 22 districts, housing prices were highest in District 1, the northernmost district, and lowest in District 12, southwest of downtown. The average price per square meter in District 1 was four times that in District 12.
Rohani kicked off his administration’s program of housing six years into his presidency and six years after he killed President Ahmadi-nejad’s Mehr housing program, which was plagued by wastefulness and corruption. Many of those apartment units were also built on land that was readily available but far from jobs and the housing was unwanted.
Rohani issued directives for the start of construction operations in several provinces—Tehran, Khorasan Razavi, Khorasan South, Esfahan, Hormozgan and Chaharmahal va Bakhtiari.
The National Action Plan for Construction and Supply of Housing aims to construct 400,000 small and medium-size apartments (each 70 to 100 square meters or 750 to 1,075 square feet) across the country and particularly in Tehran, where housing prices have risen most sharply.
Of the total number of homes, about half will be built in Tehran’s suburban “new towns” such as Parand, west of the capital, and Pardis, east of the city.
The government is hoping to complete the new units by April 2021.
While the ministry will provide the land for the new developments, it said it will only supervise construction, enlisting private sector construction firms who will bid for contracts that entitle them to receive state loans and subsidized building materials.
The emphasis, like with the Mehr program, is to construct wholly new towns outside the country’s giant cities. The Financial Tribune said that so far 14 such “new towns” have been launched in 11 provinces, but were 80 percent empty as of 2017, largely because of the distance to jobs.