Authored by the expert who managed and guided the team behind the Iran Property Pack
Everything you need to know before buying real estate is included in our Iran Property Pack
Iran's property market in 2025 shows significant regional variations, with Tehran averaging $1,100-$1,500 per square meter while emerging cities like Karaj offer better value at $500-$750 per square meter.
Foreign buyers typically need to purchase properties with cash since mortgage financing is primarily available to Iranian nationals, and total transaction costs including taxes and fees add approximately 4-6% to the purchase price.
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.
As of September 2025, Tehran leads Iran's property market with prices between $1,100-$1,500 per square meter, while luxury northern districts reach up to $1,900 per square meter.
Emerging cities like Mashhad, Karaj, and Isfahan offer significantly better value with annual price growth of 15-25%, making them attractive for both residents and investors.
| City | Average Price per sqm (USD) | Annual Growth Rate |
|---|---|---|
| Tehran | $1,100 - $1,500 | 16%+ |
| Isfahan | $650 - $1,200 | 15-25% |
| Shiraz | $700 - $1,400 | 15-25% |
| Mashhad | $600 - $900 | 18% |
| Karaj | $500 - $750 | 18% |
What's the current average property price in Iran?
As of September 2025, Iran's residential property market shows significant price variations across major cities.
Tehran leads with average prices between $1,100-$1,500 per square meter, with luxury northern districts like Elahiyeh, Zafaraniyeh, and Niavaran reaching $1,400-$1,900 per square meter in prime locations.
Isfahan offers more moderate pricing at $650-$1,200 per square meter, with central areas approaching $1,200 and suburban zones dropping to around $700 per square meter. Shiraz follows a similar pattern with $700-$1,400 per square meter, where city center properties command higher prices while typical neighborhoods range from $450-$650 per square meter.
Mashhad represents one of the more affordable major cities at $600-$900 per square meter, making it attractive for both residents and investors seeking value.
It's something we develop in our Iran property pack.
How do prices vary between apartments, houses, and luxury properties?
| Property Type | Price Range per sqm (USD) | Location Examples |
|---|---|---|
| Budget Apartments | $400 - $700 | Southern Tehran, peripheral city zones |
| Standard Apartments | $700 - $1,200 | Central locations in major cities |
| Luxury Apartments | $1,400 - $1,900 | North Tehran premium districts |
| Central Houses | $700 - $1,200 | Older villas, city-center homes |
| Suburban Houses | $500 - $900 | More space, less central locations |
What are the average prices in major cities like Tehran, Isfahan, and Shiraz, and how do they compare with smaller or upcoming areas?
Tehran maintains its position as Iran's most expensive property market, particularly in luxury northern districts that consistently outperform other regions.
Isfahan and Shiraz offer significantly better value for money, with both cities experiencing strong annual growth rates of 15-25% as infrastructure improvements and cultural tourism drive demand higher.
Karaj has emerged as a budget-friendly alternative for Tehran commuters, with prices ranging from $500-$750 per square meter and showing impressive 18% annual growth in 2025. This makes Karaj particularly attractive for buyers priced out of Tehran's market.
Second-tier cities including Qom, Tabriz, and Kish Island are gaining appeal due to ongoing infrastructure upgrades and government investment plans, though they remain significantly more affordable than major metropolitan areas.
Peripheral areas in Shiraz, Mashhad, and other major cities typically cost 30-50% less per square meter compared to their respective city centers.
What are the most expensive neighborhoods, the budget-friendly ones, and the areas expected to rise in value soon?
Iran's most expensive neighborhoods are concentrated in Tehran's northern districts, where international buyers and wealthy locals compete for premium properties.
The highest-priced areas include:
- Elahiyeh - Tehran's premium district with international amenities
- Zafaraniyeh - Exclusive residential area with luxury shopping
- Niavaran - Historic upscale neighborhood with cultural significance
- Fereshteh - Modern high-rise district popular with professionals
- Velenjak - Northern Tehran area with mountain views and exclusivity
Budget-friendly options are found in southern Tehran districts, Karaj for Tehran commuters, and peripheral areas of major cities that offer 30-50% savings compared to city centers.
Areas expected to rise in value include Karaj due to affordability and transport links, Mashhad driven by religious tourism growth, and Shiraz/Isfahan benefiting from cultural tourism and infrastructure development.
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How do prices differ depending on the size or surface of the property?
Property size significantly impacts both absolute pricing and market dynamics in Iran's residential sector.
Smaller units under 80 square meters are experiencing the fastest price increases and represent the most actively traded segment due to affordability concerns among buyers. In 2025, approximately 40% of Tehran transactions involved sub-80 square meter apartments.
These compact properties appeal to first-time buyers, young professionals, and investors seeking rental income from the growing urban population. Their popularity drives higher per-square-meter prices despite smaller absolute transaction values.
Larger family homes and villas command higher absolute costs but show slower percentage appreciation rates. These properties are more commonly found outside city centers where land availability allows for larger footprints.
The trend toward smaller units reflects both economic pressures and changing lifestyle preferences in Iran's major cities.
What is the total cost of purchase when you include fees, taxes, and legal costs?
Property purchase in Iran involves several mandatory costs beyond the property price that buyers must factor into their total investment.
Transfer tax represents the largest additional cost at 3-5% of the property value, paid by the buyer. Stamp duty adds another 0.5% to the buyer's expenses, while registration fees contribute an additional 0.1%.
Combined, these mandatory costs total 3.6-5.6% of the property price for buyers completing a full buy-and-sell cycle. Legal and realtor fees are additional but remain relatively low compared to international standards.
Cash buyers often negotiate better prices and can close deals faster than those requiring financing, partially offsetting these additional costs through improved purchase terms.
It's something we develop in our Iran property pack.
How do mortgages and financing options affect the real cost of buying a property?
Iran's mortgage market presents significant challenges that make cash purchases the preferred option for most property buyers.
Mortgage financing is generally reserved for Iranian nationals, with foreign buyers almost always required to pay cash for their property purchases. Even for eligible Iranian buyers, home loan rates of 19-23% over 20-year terms make borrowing prohibitively expensive.
The mortgage process requires purchasing "housing loan bonds," which significantly increase upfront costs beyond the standard interest rates. These additional requirements often make the total cost of financing higher than anticipated.
Cash buyers benefit from negotiating power and faster transaction completion, while mortgaged buyers face greater risks and substantially higher total costs due to interest and fees.
Most transactions in Iran's property market are completed with cash, reflecting both the challenges of mortgage financing and the preference for immediate ownership without ongoing debt obligations.
Can you give examples of recent purchase prices for different types of properties?
Recent property transactions in Iran's major cities provide clear examples of current market pricing across different property sizes and locations.
| Property Size & Location | Price Range (USD) | Price per sqm |
|---|---|---|
| 50sqm Tehran city center | $55,000 - $75,000 | $1,100 - $1,500 |
| 100sqm Tehran city center | $110,000 - $150,000 | $1,100 - $1,500 |
| 200sqm Tehran city center | $220,000 - $300,000 | $1,100 - $1,500 |
| 100sqm Mashhad | $70,000 - $90,000 | $700 - $900 |
| 100sqm Karaj | $50,000 - $75,000 | $500 - $750 |
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 are the smartest choices right now if someone wants to live in Iran versus rent out a property short term or long term versus buy to resell later?
Investment strategy in Iran's property market should align with specific goals and market conditions in different cities.
For personal residence, second-tier cities like Isfahan, Shiraz, and Karaj offer excellent value combining amenities with affordability. These locations provide quality lifestyle options without Tehran's premium pricing.
Short-term rental opportunities are strongest in Mashhad near religious shrines and in Shiraz/Isfahan's tourist centers, where consistent visitor demand supports higher rental rates. These locations benefit from Iran's domestic and religious tourism sectors.
Long-term rental investments perform well in North Tehran apartments for stability and higher-income tenants, while Karaj offers opportunities to capitalize on the supply-demand gap created by Tehran commuters.
Buy-to-sell strategies work best in Mashhad and Karaj due to strong price growth, while smaller city-center apartments under 80 square meters provide better liquidity for quick resale when needed.
How have property prices changed compared to one year ago and compared to five years ago?
Iran's property market has experienced dramatic price movements over both short and long-term periods, driven by economic factors and urbanization trends.
Over the past year (2024-2025), Tehran prices increased by more than 16%, while Shiraz and Isfahan showed even stronger growth of 15-25%. Karaj emerged as a standout performer with 18% annual growth as buyers sought affordable alternatives to Tehran.
The five-year perspective reveals extraordinary price appreciation, with Tehran property values increasing approximately 1,700% since 2019. While much of this increase reflects currency devaluation and inflation, real estate has served as a hedge against economic uncertainty.
Major cities nationwide have experienced substantial price surges driven by ongoing urbanization and inflationary pressures that make real estate attractive for wealth preservation.
These dramatic increases highlight both the opportunities and risks in Iran's property market, where economic factors can drive rapid price changes in relatively short periods.
What's the forecast for property prices over the next one year, five years, and ten years?
| City | 1-3 Years | 3-5 Years | 5-10 Years |
|---|---|---|---|
| Tehran | -5% to +5% | +3% to +8% | +5% to +10% |
| Mashhad | +8% to +12% | +6% to +10% | +5% to +8% |
| Isfahan | +10% to +15% | +8% to +12% | +6% to +10% |
| Karaj | +15% to +20% | +12% to +18% | +8% to +15% |
It's something we develop in our Iran property pack.
How do Iran's property prices compare with other large cities in similar countries?
Iran's property market positioning becomes clearer when compared to regional markets with similar economic and geographic characteristics.
Tehran's current pricing of $1,100-$1,500 per square meter places it competitively against Istanbul at approximately $1,600 per square meter, though Istanbul shows a downward trend while Tehran maintains upward pressure.
Dubai commands significantly higher prices at $2,500-$3,000 per square meter in central areas, but offers stronger rental yields of 7-8% that make it attractive for investors seeking income generation.
Cairo represents the lower end of regional pricing at $500-$900 per square meter in central locations, making Iran's major cities more expensive than Egypt's capital but still accessible compared to Gulf markets.
Rental yields in Iran's tourist and pilgrimage centers can compete with regional markets, though Dubai and Istanbul generally provide higher raw returns for international investors seeking immediate income generation.
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.
Iran's property market in 2025 presents opportunities for both residents and investors willing to navigate its cash-dominated landscape and regional price variations.
Success depends on understanding local dynamics, choosing the right location for your goals, and preparing for transaction costs that add 4-6% to purchase prices.
Sources
- Sands of Wealth - House Prices in Iran
- Sands of Wealth - House Prices in Iranian Rial
- Sands of Wealth - Iran Price Forecasts
- Sands of Wealth - Iran Which Area
- YouTube - Iran Real Estate Analysis
- YouTube - Tehran Property Market
- Gulf Citypedia - Where Rich Live in Iran
- Sands of Wealth - Iran Housing Forecast
- Global Property Guide - Iran Buying Guide
- Sands of Wealth - Moving to Iran Buy Property