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Tehran's real estate market presents significant opportunities for investors and homebuyers, with average house prices ranging from $95,000 to $150,000 for a standard 100-square-meter apartment as of August 2025.
The Iranian capital has experienced remarkable property appreciation over the past five years, with prices more than doubling in many districts. Understanding Tehran's diverse neighborhoods, from luxury north Tehran areas to emerging suburban zones, is crucial for making informed investment decisions.
If you want to go deeper, you can check our pack of documents related to the real estate market in Iran, based on reliable facts and data, not opinions or rumors.
Tehran's average house prices range from $1,100-$1,500 per square meter, with luxury north Tehran districts commanding premium rates and southern areas offering more affordable options.
Property values have doubled over the past five years, driven by inflation and currency pressures, making Tehran one of the fastest-appreciating real estate markets in the region.
| District | Price per m² (USD) | 100m² Apartment Price |
|---|---|---|
| Elahiyeh/Fereshteh (Luxury) | $1,400-$1,500+ | $140,000-$150,000 |
| Central Tehran | $1,100-$1,300 | $110,000-$130,000 |
| South/East Tehran | $950-$1,100 | $95,000-$110,000 |
| Karaj (Emerging) | $800-$1,000 | $80,000-$100,000 |
What's the average total purchase price of homes in Tehran, including all fees and taxes?
The average house price in Tehran ranges from $1,100 to $1,500 per square meter as of September 2025.
When purchasing property in Tehran, buyers need to budget for additional costs beyond the listed price. Total fees, taxes, and closing costs typically add 4-7% to the property's base price. These mandatory expenses include registration fees, notary costs, value-added tax, and real estate agency commissions.
For a typical 100-square-meter apartment priced at $1,300 per square meter, the calculation works as follows: the base price equals $130,000, additional fees range from $5,200 to $9,100, bringing the total purchase cost to between $135,200 and $139,100.
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These additional costs are non-negotiable and must be paid in cash at the time of purchase, making proper financial planning essential for Tehran property buyers.
What are the typical average prices per square meter for different property types across Tehran's neighborhoods?
Tehran's property market shows significant price variations based on both property type and location, with apartments, houses, and villas each commanding different premium rates.
| Property Type | Central Tehran | Affluent Districts (Elahiyeh, Fereshteh) | Budget Districts (South/East) |
|---|---|---|---|
| Apartment | $1,100-$1,400 | $1,400-$1,500+ | $950-$1,100 |
| House | $1,200-$1,500 | $1,450-$1,600 | $900-$1,100 |
| Villa | $1,400-$2,000 | $1,800-$2,200 | $1,200-$1,400 |
Apartments represent the most common purchase option in Tehran's residential market, accounting for approximately 70% of all property transactions. Villas command the highest prices, particularly in luxury north Tehran districts where they can exceed $2,200 per square meter for premium properties with gardens and exclusive amenities.
How do average prices differ between central, affluent districts and emerging areas?
Tehran's property market exhibits distinct price tiers based on geographic location and neighborhood prestige levels.
The most expensive areas are concentrated in north Tehran, particularly Elahiyeh and Fereshteh Street, where properties command $1,400 to $1,500+ per square meter. These affluent districts offer superior infrastructure, proximity to international schools, shopping centers, and better air quality due to higher elevation.
Central Tehran represents the mid-market segment, with prices ranging from $1,100 to $1,300 per square meter. These areas provide good access to business districts, government offices, and transportation networks while maintaining reasonable property values.
Budget-friendly options are found in southern and eastern Tehran, where prices range from $950 to $1,100 per square meter. Despite lower prices, these areas often face challenges including longer commute times, less developed infrastructure, and environmental concerns.
Emerging areas like Karaj, located near Tehran, offer properties at 20-30% below central Tehran prices while providing rapid growth potential due to expanding job opportunities and improved transportation links to the capital.
What are sample purchase prices for a standard-size home in different neighborhoods right now?
As of September 2025, a standard 100-square-meter apartment in Tehran varies significantly in price depending on the chosen neighborhood and property condition.
In luxury districts like Elahiyeh and Fereshteh, a 100-square-meter apartment typically costs between $140,000 and $150,000. These properties often feature modern amenities, building security, parking spaces, and proximity to upscale retail and dining establishments.
Mid-range neighborhoods in central Tehran offer 100-square-meter apartments priced from $110,000 to $130,000. These properties provide good value for money with decent build quality and reasonable access to city amenities.
Budget-conscious buyers can find 100-square-meter apartments in south and east Tehran for $95,000 to $110,000. For reference, a smaller 75-square-meter, 30-year-old apartment in affordable districts typically costs around $38,400.
Emerging suburban areas like Karaj present opportunities for 100-square-meter apartments priced between $80,000 and $100,000, offering potential for future appreciation as these areas develop.
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How much have average home prices changed over the past five years?
Tehran's residential property market has experienced extraordinary price appreciation over the past five years, with many districts seeing prices more than double.
From late 2020 to mid-2025, average prices increased from approximately $480 per square meter to over $1,100 per square meter, representing more than a 100% increase in US dollar terms. This dramatic appreciation translates to an annualized growth rate of 10-20% in dollar terms, though the growth rate in local currency terms has been much higher due to persistent inflation and currency devaluation.
The price surge has been driven by multiple factors including economic sanctions, currency instability, inflation pressures, and limited housing supply relative to population growth. Additionally, real estate has served as a hedge against inflation for Iranian investors, further driving demand and prices upward.
Luxury north Tehran districts have shown even more pronounced appreciation, with some premium areas experiencing price increases exceeding 150% over the five-year period.
This rapid appreciation has significantly outpaced income growth, making homeownership increasingly challenging for middle-class Iranian families and creating opportunities for international investors with foreign currency holdings.
How much have average home prices changed over the past year?
Tehran's property market continued its upward trajectory over the past year, with average house prices increasing by 9-12% from mid-2024 to mid-2025.
This annual appreciation rate demonstrates the market's sustained momentum despite economic challenges and international sanctions. The growth rate has been relatively consistent across different property types and neighborhoods, though luxury districts have shown slightly higher appreciation rates.
Rental prices have also surged dramatically, growing by 28-32% year-on-year, indicating strong underlying demand for housing and continued inflationary pressures in the real estate sector.
The consistent price growth reflects ongoing factors including limited new construction, population growth, and real estate's role as an inflation hedge in Iran's economic environment.
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What's the forecast for average home prices in Tehran over the next year?
Most real estate analysts expect Tehran's property prices to continue appreciating over the next year, with projected growth in the 8-12% range.
This forecast assumes the continuation of current economic and political trends, including ongoing inflation pressures and currency volatility that have historically driven real estate demand as an investment hedge.
Key factors supporting continued price growth include limited housing supply, ongoing urbanization, and Tehran's role as Iran's economic center. However, potential risks include economic policy changes, international sanctions developments, and possible market saturation in luxury segments.
Emerging neighborhoods and suburban areas may experience higher appreciation rates as buyers seek more affordable alternatives to central Tehran, while luxury districts may see more moderate growth due to already elevated price levels.
Investors should monitor currency exchange rates closely, as significant rial strengthening could impact dollar-denominated returns, while further devaluation might accelerate local-currency price increases.
What's the forecast for average home prices in Tehran over the next five years?
Long-term projections for Tehran's residential market suggest continued real-terms growth over the next five years, with potential price increases of 40-60% by 2030.
This forecast is based on structural factors including Iran's young population, continued urbanization toward Tehran, and limited land availability for new development in prime areas. However, these projections remain subject to significant currency volatility and economic policy changes.
Infrastructure development projects, including metro line expansions and road improvements, are expected to boost property values in currently emerging areas while maintaining premium valuations in established luxury districts.
The timeline for sanctions relief or economic policy reforms could significantly impact price trajectories, potentially moderating growth if economic stability improves or accelerating appreciation if inflationary pressures persist.
Demographic trends suggest sustained housing demand as Iran's large young population enters prime home-buying years, supporting continued market growth despite affordability challenges.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Iran versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What's the forecast for average home prices in Tehran over the next ten years?
Tehran's ten-year property price outlook remains highly uncertain but historical patterns suggest the possibility of significant appreciation, potentially exceeding 100% over the decade.
Long-term projections depend heavily on Iran's economic development trajectory, including potential sanctions relief, infrastructure modernization, and monetary policy reforms. Current inflationary trends, if uncorrected, could drive continued nominal price increases while real returns remain variable.
Urban planning initiatives, including the development of satellite cities and transportation networks, may redistribute demand across greater Tehran while maintaining overall market growth. Climate change adaptation and environmental regulations could also influence long-term property values.
International investment flows, if restrictions are lifted, could significantly impact market dynamics and price levels over the ten-year horizon.
Given the high uncertainty of long-term forecasts in Iran's economic environment, investors should focus on shorter-term opportunities while maintaining flexibility for changing market conditions.
What are the average costs of financing a home in Tehran?
Home financing in Tehran presents significant challenges due to high interest rates and strict lending requirements that reflect Iran's economic conditions.
Mortgage interest rates typically exceed 18-22% annually, reflecting inflation rates and lending risks in the Iranian banking system. These high rates make financing expensive compared to international standards and significantly impact monthly payment calculations.
Down payment requirements are substantial, usually ranging from 30-40% of the property's purchase price. This means buyers need significant upfront capital, with a $110,000 apartment requiring $33,000 to $44,000 in cash for the down payment alone.
For a $110,000 apartment with a 35% down payment ($38,500), the remaining $71,500 financed at typical Iranian mortgage rates would result in monthly payments exceeding $800-$950. These payment levels far exceed average Iranian incomes, making cash purchases more common than financed transactions.
Alternative financing options include developer payment plans, private lending arrangements, and family financing, though these typically carry their own risks and higher costs than traditional banking products.
For investment purposes, what are the best current strategies between living in a property versus renting it out?
Tehran's rental market offers several investment strategies with varying risk-return profiles depending on property type and location.
1. **Short-term rental strategy** works best in luxury areas and central Tehran, targeting business travelers and temporary residents. Prime locations can generate higher daily rates but require active management and marketing.2. **Long-term rental approach** provides steady income with yields of 5-7% in prime locations. This strategy offers more predictable cash flow and lower management requirements but may limit rental rate adjustments.3. **Buy-and-resell strategy** has historically delivered strong returns given Tehran's rapid price appreciation, but timing becomes crucial given recent price surges and potential market cooling.4. **Emerging area investment** in places like Karaj offers the best potential for value appreciation as these areas develop infrastructure and attract more residents.5. **Mixed-use strategy** combining personal use and rental income allows investors to benefit from both lifestyle and investment returns while maintaining flexibility.It's something we develop in our Iran property pack.
How do Tehran's current average house prices compare with other major cities?
Tehran's property prices position the city as moderately expensive within the regional context but relatively affordable compared to major international markets.
Within Iran, Tehran commands premium pricing compared to other major cities. Isfahan and Shiraz average $700-$1,200 per square meter, while Mashhad ranges from $700-$900 per square meter, making Tehran 20-50% more expensive than other Iranian urban centers.
Regionally, Tehran's $1,100-$1,500 per square meter proves significantly cheaper than Dubai ($2,800-$5,500), Tel Aviv ($8,000+), or Istanbul ($2,500-$3,500), making it attractive for regional investors seeking entry-level opportunities.
| City | Average Price per m² (USD) | Relative to Tehran |
|---|---|---|
| Tehran | $1,100-$1,500 | Baseline |
| Dubai | $2,800-$5,500 | 2-4x higher |
| Istanbul | $2,500-$3,500 | 2-3x higher |
| Isfahan | $700-$1,200 | 20-40% lower |
| Mashhad | $700-$900 | 30-50% lower |
These comparisons highlight Tehran's position as a mid-tier regional market with potential for appreciation toward regional benchmarks as Iran's economy develops and international restrictions potentially ease.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Tehran's housing market presents both opportunities and challenges for investors and homebuyers in 2025.
With average prices ranging from $95,000 to $150,000 for standard apartments and continued appreciation expected, careful neighborhood selection and financing strategy remain crucial for success in this dynamic market.