According to reports from Iranian economic sources, the stagnation in Iran’s housing market has intensified, with real estate agents reporting a decline in visits and a lack of pre-holiday market activity.
Studies indicate that buyers with limited budgets are turning to small-sized, older units and even basement apartments.
The state-run newspaper Donya-e-Eqtesad reports that apartments priced below 40 billion rials (approximately $51,280) are mostly located in eastern and southern Tehran, with areas ranging from 30 to 80 square meters.
For instance, a 75-square-meter, 30-year-old unit in the Jashnvareh neighborhood is priced at 30 billion rials (approximately $38,400).
Similarly, Davood Beigi-Nejad, the deputy head of the Tehran Real Estate Consultants Union stated that due to the “deep stagnation” in the housing market, there are no buyers despite the rising dollar rate.
On Monday, December 23, Beigi-Nejad told the state-run ILNA news agency that while the number of properties listed for sale has increased significantly, activity in the housing market is not demand-driven and does not lead to finalized contracts.
According to this industry representative, housing seekers only inquire about prices at real estate agencies without making purchases.
Beigi-Nejad believes that “reduced purchasing power” and “declining liquidity in the market” have decreased housing transactions.
He explained, “Most contracts and transactions are based on bartering; meaning assets must be sold first to enable a housing market transaction.”
The deputy head of the Tehran Real Estate Consultants Union noted that while construction costs and housing prices have risen due to the higher dollar rate, prices remain unchanged because of the “lack of buyers.”
The free-market dollar rate has been on the rise in recent months and has now surpassed 790,000 rials.
Traditionally, Iranian markets react to rising dollar rates, but housing transactions have remained stagnant despite the increase in the dollar’s value.
Meanwhile, other investment markets in Iran, such as stocks and gold, have grown alongside the rising dollar rate.
The purchasing power of housing loans has declined with ongoing inflation in recent years, and other government initiatives, such as the “National Housing Scheme” (Maskan-e Melli), have yielded no results.
On November 22, Gholamreza Mirzaei, a member of Iranian regime’s Majlis (parliament), remarked during a warning to the Minister of Roads and Urban Development that “owning a home has become a dream for people,” adding that “the National Housing Scheme has not achieved its goals.”
The increased risk of military conflict between Iran and Israel and ongoing security and political developments in the Middle East have also driven liquidity holders toward safer markets, such as currency and gold, exacerbating the housing market stagnation.
