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
What do the latest numbers reveal about Iran’s real estate market? Are property prices on the rise, or are they stabilizing? Which cities offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Iran, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) Properties near metro stations in Tehran were priced 20% higher on average in 2024
In 2024, properties near metro stations in Tehran were priced 20% higher on average.
This trend is largely due to the positive impact of metro stations on property values, especially in poorer regions of Tehran. Metro stations enhance the spatial quality of neighborhoods, making them more attractive places to live.
Government initiatives for urban renewal and infrastructure development have also played a significant role. These projects improve access and mobility, which are key factors in increasing land values and property prices. A metro station can make a neighborhood more desirable, leading to higher demand.
Despite some fluctuations in the housing market, the overall trend was driven by improved accessibility and urban development projects. These factors combined to create a situation where properties near metro stations saw a notable increase in value.
The benefits of enhanced transportation options and urban planning efforts are clear. The presence of a metro station not only boosts property prices but also reflects the success of urban planning in making neighborhoods more livable.
In summary, the development of metro stations and government initiatives have made certain areas more appealing, resulting in higher property prices near these transit hubs.
Sources: International Research Society for Public Service and Development, Iran News Update
2) Housing construction permits in Iran rose by 5% annually from 2021 to 2024
Between 2021 and 2024, housing construction permits in Iran increased by 5% annually.
One major factor is urbanization. Many people are moving to cities like Tehran, seeking better job opportunities and living conditions. This urban shift has led to a higher demand for housing, sparking more construction projects and, in turn, more permits.
Demographic changes also play a part. As the population grows, more young families are looking for homes. This surge in demand for new housing developments has likely contributed to the rise in construction permits.
Despite some fluctuations, the overall trend in construction permits shows a steady increase. This pattern is likely influenced by the factors mentioned above.
Data from CEIC highlights these trends, showing how urbanization and demographic shifts are shaping the housing market.
In summary, the combination of urban migration and a growing population is driving the need for more housing, resulting in a consistent rise in construction permits.
Source: CEIC Data
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.
3) At least 40% of Tehran's real estate deals in 2024 were for properties under 80 square meters
In 2024, at least 40% of real estate transactions in Tehran involved properties under 80 square meters.
Back in 2023, Tehran saw a noticeable decline in housing transactions. For example, November 2023 had nearly a 4% drop in transactions compared to October, and a staggering drop of over 60% compared to November 2022. This shift likely nudged buyers towards smaller, more affordable homes.
Tehran's population is growing, and urbanization is on the rise. This means more people are looking for homes, and smaller properties are naturally more appealing due to their affordability. In a city where housing prices and inflation are high, these smaller homes become a practical choice for many.
The Iranian government had promised to build one million housing units each year, but this promise wasn't fulfilled. This unfulfilled promise added to the market's unpredictability. With housing price inflation reports being inconsistent, buyers leaned towards smaller, less risky investments.
In this context, smaller properties became a safer bet. They offered a way to navigate the unpredictable market, especially when larger investments seemed too risky. Smaller homes provided a sense of security in a volatile environment.
As a result, the trend towards smaller properties in Tehran isn't just about size; it's about adapting to economic realities. These homes meet the needs of a diverse and growing population, offering affordability and stability.
Sources: Iran News Update, Iran News Update
4) The Iranian rial's 35% depreciation in 2024 affected real estate prices
The Iranian rial depreciated by approximately 35% in 2024, shaking up the real estate market.
When a currency like the rial loses value, it means you need more of it to buy the same goods or services. In Iran, this depreciation made imports, including essential construction materials, more expensive. As a result, the cost of building new homes shot up, forcing developers to raise housing prices to cover these additional expenses.
Even if the demand for housing stayed steady, prices climbed because of these increased construction costs. The real estate market in Iran is already under pressure from factors like population growth and urban migration, which drive demand. Add the rising costs of construction due to the rial's depreciation, and you have a recipe for even higher housing prices.
This trend is particularly evident in urban areas like Tehran, where demand is already strong. The combination of a depreciating currency and high demand creates a challenging environment for potential buyers. Tehran's real estate market is feeling the squeeze, with prices climbing as developers pass on their increased costs to buyers.
For those considering buying property in Iran, it's crucial to understand how these economic shifts impact the market. The rial's depreciation has made it more expensive to build, and this cost is reflected in the prices of homes. Potential buyers need to be aware of these dynamics as they navigate the market.
Source: Iran Focus
5) Mortgage interest rates in Iran varied between 15% and 22% from 2020 to 2024
Between 2020 and 2024, mortgage interest rates in Iran fluctuated between 15% and 22%.
In most areas, the base interest rate for housing loans hovered around 22.5%, with a slight dip to 21% in low-income zones called "baft frsodeh." This stability was largely due to the prevailing economic conditions.
Iran's economic climate, marked by high inflation, significantly influenced these rates. Despite the steep interest, many found these loans feasible, underscoring the impact of inflation and other economic pressures.
Borrowers also faced the requirement to buy additional bonds, effectively pushing the interest rate to about 30.1%. This extra cost made the actual borrowing expense higher than the stated rate, adding to the perception of fluctuating rates.
Sources: Zee Property, Hamshahri Online
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6) Tehran's property prices rose by 15-20% annually from 2020 to 2024
The property market in Tehran has been on a remarkable rise from 2020 to 2024.
Back in 2020, the cost per square meter was around 263 million rials. By 2021, this figure had more than doubled to 530 million rials, marking a staggering 101% increase in just one year. This surge set the stage for a dynamic housing market.
As we moved into 2021-2022, the market didn't slow down. Instead, it experienced an 85% annual growth. July 2020 was particularly noteworthy, with a monthly price hike of 12.5%, underscoring the strong upward momentum.
Fast forward to 2023, and the average housing price in Tehran had soared to over 830 million rials. Even though there was a dip in the number of transactions, prices continued their ascent, reflecting a persistent upward trend.
By March 2024, the price per square meter had reached approximately $1,340, which was a 22.9% increase from the previous year. This consistent rise in prices highlights the robust nature of Tehran's property market.
Sources: Tehran Times, Iran Focus, Iran Focus
7) Tehran's rental increase in 2024 was limited to 25% by government regulations
In 2024, the Iranian government set a 25% cap on rental increases in Tehran to manage living costs.
Despite this, rental prices in Tehran surged. By June 2024, rent inflation hit 43.2%, nearly double the government's limit. This highlights the regulation's ineffectiveness in curbing rental hikes.
From August to November 2024, rental inflation consistently outpaced general inflation by 6.6 to 8.6 percentage points. This trend underscores the challenges in controlling rental prices through legislation.
Tehran's rental market remained volatile, with prices climbing despite government efforts. The 43.2% rent inflation in June was a stark contrast to the intended cap, reflecting ongoing economic pressures.
Throughout late 2024, the gap between rental and general inflation widened, indicating persistent issues. The 6.6 to 8.6 percentage point difference suggests that legislative measures were insufficient.
These figures reveal the complexities of Tehran's rental market, where government interventions struggled to make a significant impact. The 25% cap was overshadowed by actual market dynamics.
Sources: Iran Focus, NCR Iran, Iran Focus
8) Short-term rentals in Iran increased by 25% from 2022 to 2024 due to rising tourism
The short-term rental market in Iran has grown by 25% between 2022 and 2024, thanks to a tourism boom.
From January to March 2024, Iran saw a 60% increase in foreign tourist arrivals compared to the same period in 2023. This surge is largely due to the Iranian government's initiatives, like simplifying visa processes and waiving visas for citizens of 33 countries. These changes have made it easier for tourists to visit, boosting the demand for short-term rentals.
In 2023, Iran's tourism sector experienced a 21% growth, bouncing back strongly from the COVID-19 pandemic. The market value of the tourism sector reached 7400 trillion rials, and employment in this sector rose by 10.3%, with 1.6 million people working in tourism. This accounted for 6.6% of the country's total employment, naturally increasing the need for accommodations, including short-term rentals.
Foreign tourists spent 700 trillion rials in 2023, marking an 83.6% increase from the previous year. Meanwhile, domestic tourists spent 4939 trillion rials, an 18.7% rise from 2022. This uptick in spending highlights the growing demand for services like short-term rentals, as more visitors needed temporary places to stay.
Sources: Tasnim News, Tehran Times
We made this infographic to show you how property prices in Iran compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Residential land prices in Shiraz were 25% higher in 2024 compared to 2022
In 2024, residential land prices in Shiraz soared by 25% compared to 2022.
This surge is largely due to the bustling real estate market in areas like Sadra and Malaliabad. Urbanization and economic growth have fueled demand, while the available land hasn't kept pace. As more people flock to these neighborhoods, the competition for plots has intensified, naturally pushing prices higher.
Moreover, Iran's economic climate has been a significant factor. Inflation and government policies have influenced living costs and property values. While exact figures for the 25% hike aren't pinpointed, these economic elements have undeniably played a part in the price escalation.
In Shiraz, the allure of urban living is undeniable. People are drawn to the city's vibrant lifestyle, and as they settle in, the demand for residential land continues to climb. This trend is particularly evident in sought-after districts, where the charm of city life meets the scarcity of available land.
For potential buyers, understanding these dynamics is crucial. Recognizing the impact of economic trends and urbanization can help navigate the market. As Shiraz continues to grow, staying informed about these factors will be key to making savvy property investments.
Sources: Khan Villa, Divar.ir
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.