Radiofarda – The latest figures released by the Central Bank of Iran (CBI) in early November, puts the rise in real estate prices between October 2018 and the same month last year at 83.5 percent.
The CBI says house prices in Tehran are now based on the benchmark of 86,100,000 rials per square meter of built-in area. This amounts to around $575 per sqm or $52 per square foot at the open market exchange rate, which is more relevant in this case since sellers cannot get cheap dollars based on the government rate.
The average house price per square meter in Tehran during the past seven months, when Iran’s economic crisis was at its worst, had a 55.5 percent rise in comparison with the similar period last year, the CBI reported.
As in previous CBI reports about real estate, the price increase has coincided with a huge drop in transactions. In Tehran, the Iranian capital sales were down by more than 32 percent over the past month, as an indication of continued recession in this sector.
The reason for this odd situation of less sales but higher prices is the devaluation of the Iranian currency. Many Iranians now think of the price of a house, and effectively everything else, in terms of U.S. dollars. Those few who can invest in real estate in the midst of an economic crisis, real estate is the safest bet and for those willing to sell, the price has to be higher to account for at least part of the currency devaluation.