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
Why is Iran emerging as a compelling destination for property investment in 2025? Is it the untapped potential of its real estate market, the strategic location bridging East and West, or the affordability compared to other regional markets? What are the key advantages for investors?
We get asked these questions all the time because we’re on the ground, working closely with developers, real estate agents, and investors like you. With so much interest in this market, we’ve decided to turn our individual answers into a comprehensive article for everyone to benefit from.
Our goal is to provide a clear case for investing in Iran's real estate market, backed by our firsthand experience and market knowledge.
If you think we missed an important point in our content or want to know more, don’t hesitate to reach out (we answer super fast). Your feedback makes our content even stronger.
Finally, please note that this is not financial or investment advice. Investing in real estate carries inherent risks, and market conditions can change unexpectedly. We strongly encourage you to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
How this content was created 🔎📝
1) Iran’s growing tech industry means more demand for modern office spaces
Iran's tech industry is booming, and this surge is driving a need for modern office spaces.
In Tehran, the number of tech startups has skyrocketed, jumping from 150 in 2014 to around 400 by 2015. This means more companies are on the hunt for office spaces that can meet their modern needs. These startups are not just looking for any office; they want spaces that can support their innovative work environments.
Foreign investment is another big player in this scenario. Since 2021, Iran's tech sector has seen an influx of over $4 billion annually from abroad. This financial boost allows tech companies to expand and hire more people, which naturally leads to a greater demand for office space. As these companies grow, they need more room to accommodate their expanding teams and operations.
The Iranian government is also stepping up by supporting the tech industry with various initiatives. These include funding and incubation programs that help startups get off the ground. As these companies grow, they need modern office spaces to operate efficiently. The government's push for e-government services and stronger economic ties with other countries is further fueling the tech sector's growth.
Tech companies are expanding their operations in major Iranian cities, and it's not just about adding more people. They're developing sophisticated and innovative business models that require flexible office spaces equipped with the latest technology. The creation of technology parks and special economic zones is attracting multinational companies, which further increases the demand for these modern office spaces.
With the establishment of these technology parks, Iran is becoming a hub for multinational companies, which is a significant factor in the rising demand for state-of-the-art office environments. This trend is reshaping the landscape of Iran's major cities, making them more attractive to both local and international tech firms.
Sources: UNDP, Tehran Times, World Bank Blogs, Mordor Intelligence
2) With e-commerce growing, there’s more demand for warehouse and logistics properties
The e-commerce scene in Iran is booming, with transactions skyrocketing by 75% in early 2023.
By March 2024, the market value of online sales had nearly doubled, hitting close to $60 billion. This surge is not just about numbers; it's reshaping how Iranians shop and do business.
With this growth, the number of online retailers is also climbing. In the first half of 2023, over 39,000 online shops earned the e-Namad certificate, a 25% jump from the previous year. This certification is crucial for building trust with customers in Iran's digital marketplace.
Online purchases have exploded, with sales reaching around $47 billion in 2023. This trend is pushing logistics companies to innovate, ensuring they can keep up with the demand for speedy deliveries.
Retailers are betting big on logistics, expecting same-day or next-day deliveries to become the norm by 2029. This means more investment in infrastructure like automated and micro-fulfillment centers.
As e-commerce grows, so does the need for efficient logistics, making it a hot area for investment. The rise of e-commerce is increasing demand for warehouse and logistics properties.
Sources: IntelliNews, Mordor Intelligence, Shopify
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.
3) In Iran, the cultural focus on owning homes strengthens the real estate market
In Iran, owning a home is a cultural cornerstone, symbolizing stability and success.
Many Iranians see real estate as a safe haven for their money, especially during economic ups and downs. Property values have consistently appreciated over the last 30 years, making it a preferred investment over stocks or other assets. This trend is driven by a desire to shield assets from inflation and currency devaluation, which are common concerns in the region.
Government initiatives also bolster the real estate market. Programs like the Iranian National Housing program offer financial support for housing development, making home ownership more accessible. These efforts are complemented by relatively low mortgage interest rates, which are attractive compared to global standards.
In cities like Tehran, the demand for property is particularly high. Urban areas see a constant influx of people seeking better job opportunities, which fuels the housing market. This urban migration keeps the demand for homes robust, further solidifying real estate as a sound investment.
Moreover, the cultural emphasis on home ownership means that renting is often seen as a temporary solution. Many families strive to own their homes, viewing it as a long-term goal and a sign of personal achievement. This mindset keeps the market active, as people are always looking to buy rather than rent.
Even with economic challenges, the Iranian real estate market remains resilient. Investors continue to see property as a stable asset, driven by cultural values and government support. This combination ensures that the market stays strong, offering opportunities for both local and international buyers.
Sources: Wikipedia, Iran Real Estate Market, Iran International
4) Urbanization in Iran is growing, so more people are looking for city properties
Iran's cities are growing fast, with the urban population reaching 68,892,205 in 2023.
This growth is part of a larger trend, with the urban population increasing by 1.29% from the previous year. The Iranian government is actively responding to this shift with the National Housing Movement, a plan to build four million homes in four years, focusing heavily on urban areas.
Out of these four million homes, 3.2 million are earmarked for cities, showing a clear push towards urban development. This initiative is not just about numbers; it's about transforming city living with better infrastructure and housing options.
In major cities, there's been a surge in construction permits, a sign of the government's commitment to urban growth. The Housing Construction Leap Law is a key part of this, supporting the 13th government's goals and leading to the start of construction for over 209,212 residential units under the National Housing Movement.
For those considering buying property in Iran, this urbanization trend means more opportunities in city areas. The government's focus on urban housing could lead to more modern and accessible living spaces, making city life more appealing.
As Iran continues to urbanize, the demand for city properties is likely to rise, driven by these government initiatives and the growing urban population. This could be a good time to explore property options in Iran's bustling cities.
Sources: Macrotrends, Tehran Times, Trading Economics
5) Iran is offering more incentives for foreign investors in real estate
The Iranian government is rolling out the red carpet for foreign investors in its real estate market, approving $1.8 billion in foreign investment projects as of October 2024.
With the introduction of the Foreign Investment Promotion and Protection Act (FIPPA) in September 2024, Iran is making it easier for foreigners to dive into its real estate scene. This act offers a comprehensive legal framework that not only protects but also incentivizes foreign investors. You can set up wholly-owned companies, own property through these companies, and even repatriate your profits without any hassle.
Iran is sweetening the deal with significant tax breaks for foreign investors. If you're looking at sectors like hospitals or tourism, you could enjoy a 100% tax holiday for up to 13 years, depending on where you invest. This perk extends to real estate, making it a financially attractive option.
Imagine owning a piece of property in a country that's actively encouraging your investment. The Iranian government is not just offering legal protections but also financial incentives that make the real estate market here a lucrative opportunity.
These moves are part of a broader strategy to boost economic growth by increasing foreign investment. The government is keen on making the process as smooth and secure as possible for you.
So, if you're considering investing in real estate, Iran is making a compelling case with its incentives and protections tailored for foreign investors.
Sources: Press TV, Vietnam MFA, Financial Tribune
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6) With tourism on the rise, Iran offers great opportunities for short-term rental properties
Iran's tourism industry is booming, with 5.9 million international visitors in 2023, a huge leap from 880,000 in 2021.
This surge in tourists is driving up the need for places to stay, especially short-term rental properties that offer flexibility and a local touch. The Iranian government is on it, planning to build 500 hotels each year over the next five years, backed by a hefty €500 million investment to boost tourism infrastructure.
Iran's allure isn't just in numbers; it's in its rich tapestry of culture and history. With 35,000 registered cultural sites, the country is a magnet for those interested in cultural and religious tourism. Regions like Mazandaran are also seeing a rise in eco-tourism and adventure tourism, making short-term rentals near these attractions a hot commodity.
Adding to the appeal, Iran has rolled out a visa-free entry policy for 33 countries, including big players like India and Russia. This move makes it easier for international travelers to explore Iran, boosting its profile as a must-visit destination.
Social media is playing its part too, with influencers showcasing Iran's beauty and charm, further fueling the demand for short-term rentals. Tourists are increasingly looking for unique and personalized stays, and short-term rentals fit the bill perfectly.
With all these factors in play, Iran's short-term rental market is set to thrive, offering visitors a chance to experience the country in a more intimate and flexible way.
Sources: Travel and Tour World, Tehran Times, MEED
7) Iran's agricultural potential makes rural real estate a smart investment choice
Iran's agricultural potential is a strong foundation for rural real estate investments.
With the agricultural sector growing steadily, there's an expected annual growth rate of 4%, which is projected to create 250,000 jobs by 2035. This growth not only boosts the economy but also increases the demand for land and infrastructure in rural areas. The government is actively supporting this growth by upgrading agricultural practices, focusing on modern technologies like AI and satellite data to improve productivity.
This modernization makes rural areas more attractive for investment, as they promise higher returns due to increased efficiency and output. Iran's diverse climate zones, with 72 different types, allow for the cultivation of a wide range of crops. This diversity ensures that agricultural activities can be sustained throughout the year, making rural real estate a stable investment.
Additionally, the strategic location of Iran offers excellent export opportunities to neighboring countries, further enhancing the value of agricultural land. Moreover, the increasing demand for organic and locally sourced produce is driving the need for more agricultural land. As sustainable practices become more popular, rural areas that can support these practices will see a rise in real estate value.
The government's initiatives and the sector's growth create a positive environment for rural real estate investments. With the focus on modern technologies and sustainable practices, rural areas in Iran are becoming increasingly attractive for investors looking for stable and profitable opportunities.
Sources: Yield Gap, Fruitnet, Iran Investex
8) With the education sector growing, Iran has a rising need for student housing
Iran's education sector is booming, leading to a surge in demand for student housing.
With 3.2 million students enrolled in the 2023-2024 academic year, universities are bustling with activity. The high turnout for entrance exams shows that more young Iranians are eager to pursue higher education, which means they need places to live while they study.
The government is on a mission to expand educational facilities, having built or renovated thousands of schools and universities over the last decade. They're not just focusing on local students; they aim to attract over 250,000 international students by 2026, which will further increase the need for student accommodation.
In cities like Tehran, there's a noticeable shortage of student housing, making it a hot topic. The private sector sees this as an opportunity and is investing heavily in new student accommodation projects. Students today prefer modern living spaces, and urban development is increasingly centered around educational hubs.
These trends are reshaping the real estate market, with developers keen to meet the growing demand for contemporary student living. The focus is on creating environments that cater to both local and international students, offering amenities that enhance their university experience.
As Iran continues to position itself as a leading destination for international students, the pressure to provide adequate housing will only intensify. The education sector's growth is a key driver of this change, transforming the landscape of student accommodation.
Sources: Iran's Education System: A Glimpse into New Academic Year, Iran Multi-pronged Education Crisis And Its Destructive Effects, Iran among leading countries in attracting international students, Recruiting in Iran: Demand remains high in this challenging market
We have made this infographic to give you a quick and clear snapshot of the property market in Iran. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) In Iran, gardens and courtyards add cultural charm, boosting property appeal
The charm of gardens and courtyards is making properties more attractive, especially in places like Iran.
In recent years, architectural designs have embraced traditional Persian garden elements, adding a unique touch to homes. Take the Paakat Residence in Isfahan, for example. Designed by Rooydaad Architects, it features a classic Iranian style with homes built around central courtyards. This design reflects a growing demand for such features, as they offer a serene escape from the hustle and bustle of daily life.
When browsing real estate listings, you'll often see a spotlight on traditional Persian garden features like geometric layouts and water channels. These aren't just pretty to look at; they can actually boost a property's value. The Through Gardens House in Parvaneh village, crafted by BAM Architects, is a perfect example. Its U-shaped floor plan wraps around a central garden, enhancing daylight and natural ventilation, which in turn increases the property's worth.
Buyers are increasingly drawn to homes with garden spaces, showing just how much these features matter culturally. While we don't have specific survey data from 2023 or 2024, the trend is clear from the way garden features are highlighted in listings. This isn't just about aesthetics; it's about the deep-rooted cultural significance of gardens in Persian architecture.
Historically, gardens have played a crucial role in Persian architecture, with principles like the Chahar Bagh adding to the allure of properties. These gardens aren't just about beauty; they represent a connection to nature and a sense of tranquility that many buyers find irresistible.
Incorporating these elements into modern homes not only preserves cultural heritage but also enhances the living experience. The cultural significance of gardens and courtyards is undeniable, making them a key factor in property appeal.
Sources: Persian Gardens - Wikipedia, Vibrant Blue Staircases Connect Courtyard-Centric Iranian Residence - Rooydaad Architects, Sprayed Render Covers Walls of Rural Iranian House by BAM Architects - Dezeen
10) Iran’s rich history and architecture make it perfect for heritage property investments
Iran's rich history and architecture make it an appealing destination for heritage property investments.
In 2024, more than seven million visitors explored Iran's cultural heritage museums and historical landmarks, showing a growing interest in these sites. This surge in visitors signals a strong demand for heritage experiences, which can drive investment opportunities in these areas.
The Iranian government is actively preserving and promoting cultural heritage, with a notable increase in construction investment reported in 2023. This includes projects aimed at restoring and maintaining historical sites, enhancing the value and appeal of heritage properties. Historic palaces like Saadabad and Niavaran are particularly popular, attracting over one million visitors each year.
Iran is home to 28 UNESCO World Heritage Sites, such as Persepolis and the Persian Garden, which highlight the country's rich cultural heritage. These designations not only attract tourists but also catch the eye of investors interested in heritage properties. The media often showcases Iran's architectural beauty, boosting visibility and interest in these sites.
Investing in heritage properties in Iran offers a unique opportunity to be part of a growing market. The combination of government support, increasing tourism, and the allure of historical sites makes it an attractive option. The value of properties in historically significant areas is on the rise, making it a promising investment.
For those considering property investments, Iran's blend of history, culture, and architecture offers a compelling case. The country's commitment to preserving its heritage, coupled with a growing interest from tourists and investors alike, makes it a unique opportunity.
Sources: Tehran Times, Business Wire, Iran Open Data, Visit Iran
11) Iran’s low cost of living makes it appealing for retirees and expats
The cost of living in Iran is relatively low, making it a magnet for retirees and expatriates.
One of the main draws is the affordable property prices. For example, buying a home in Tehran averages around $66,556, which keeps it far from the list of the world's top 40 most expensive cities. This affordability makes Iran a tempting spot for those looking to invest in property abroad.
Living in Tehran is quite budget-friendly. According to Numbeo, a family of four can live on about $1,352.6 per month, while a single person needs around $403.3. These costs are significantly lower than in many other global cities, making it easier for newcomers to manage their finances.
Expatriates and retirees often highlight how affordable life in Iran can be. They mention that decent salaries cover daily expenses comfortably, with gasoline priced at a subsidized $0.1 per liter and internet packages costing between $5 and $10. Despite a 52% hike in food prices in 2023, essential goods and services remain relatively cheap.
Transportation and groceries are also easy on the wallet. The low cost of gasoline and internet means that even with inflation, day-to-day living expenses are manageable. This financial ease is a big plus for those considering a move.
Overall, Iran's low cost of living, from housing to daily expenses, continues to attract those seeking a more affordable lifestyle. Retirees and expatriates find it easier to stretch their budgets here compared to many other places.
Sources: IranWire, Numbeo, Iran Focus
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.