Surge in Tehran Real Estate: 60 Meter apartments become unaffordable
In the current real estate market in Tehran, the average price for a 60-square-meter apartment is estimated at 4.56 billion Iranian tomans (USD conversions below). This figure represents the average across the city; however, in the more affluent neighborhoods, the price can be approximately double or even more.
According to local reports, the price for such an apartment has increased fourteenfold compared to six years ago, based on official data from Tehran's housing market.
During the same period, the share of apartments under 60 square meters in official real estate transactions in Tehran has increased. Currently, 33.5% of housing transactions in the capital involve apartments smaller than 60 square meters, a significant increase from less than 23% six years ago.
In October 2017, apartments sized between 60 and 70 square meters had the highest proportion of sales compared to other sizes. This trend continued until 2018 but shifted thereafter, with apartments sized between 50 and 60 square meters becoming more prevalent in transactions.
For perspective, in October 2017, before the U.S. withdrawal from the JCPOA and when the dollar was trading at around 4,000 tomans, approximately 80% of Tehran's housing market transactions involved apartments larger than 60 square meters. This percentage dropped to below 70% within a year.
As of October 2022, apartments larger than 60 square meters accounted for 66.5% of the market transactions. Six years ago, the average price for a 60-square-meter apartment in Tehran was 287.4 million tomans. If you had looked in Tehran's most expensive area, District 1, the average cost for such an apartment was 615.54 million tomans, while in District 18, located in the southern part of the city, it was 136.44 million tomans. At that time, the average price per square meter in Tehran was 4.79 million tomans.
Fast forward six years, and the price has increased nearly fourteenfold. The Central Bank of Iran reports that in the past month, the average price per square meter for residential apartments in Tehran was approximately 76 million tomans, bringing the cost of a 60-square-meter apartment in Tehran to 4.56 billion tomans.
The average price per square meter in Tehran reached 8.6 million tomans in October 2018, an approximately 80% increase from the previous year. By October 2019, the average had risen to 12.72 million tomans per square meter, and in October 2020, it was approximately 26.7 million tomans. Last year, this figure increased to 43.72 million tomans, and this year, it has reached 76 million tomans per square meter.
In Majidiyeh, Tehran, a 60-square-meter apartment is currently priced at 4.75 billion tomans by a seller. This is close to the average price for housing across Tehran. The Central Bank reports that the average price per square meter in this part of District 8 is 72 million tomans. An equivalent apartment in northern Tehran is currently valued at around 8.94 billion tomans.
In District 1, the most expensive area of Tehran, the average price per square meter has reached 148.9 million tomans.
A seller in the Ozgol neighborhood, (part of the biggest risers due to proximity to Tajrish) located in District 1, is asking for 8.7 billion tomans for a 60-square-meter apartment, which includes amenities like an elevator, storage, and parking, and is approximately 10 years old.
Naturally, prices for a 60-square-meter apartment in the southern parts of the city are lower. For instance, in the Yafteh Abad neighborhood in District 18, prices can be below 2 billion tomans. A seller there has priced a 20-year-old apartment, lacking an elevator, at exactly 1.9 billion tomans.
FAST FACTS
Based on the exchange rate of 50,900 Iranian tomans (IRT) to 1 U.S. Dollar (USD) as of November 17, the price conversions for the real estate market in Tehran are as follows:
The average price for a 60-square-meter apartment in Tehran, estimated at 4.56 billion tomans, is approximately $89,587 USD.
Six years ago, the average price for such an apartment was 287.4 million tomans, equivalent to roughly $5,645 USD.
In Tehran's most expensive area, District 1 (Fereshteh), the average cost for a 60-square-metre apartment was 615.54 million tomans six years ago, translating to about $12,095 USD.
In District 18, located in the southern part of the city, the price for a similar apartment was 136.44 million tomans, or approximately $2,681 USD.
The price for a 60-square-meter apartment in Majidiyeh, Tehran, currently listed at 4.75 billion tomans, is equivalent to about $93,319 USD.
An equivalent apartment in northern Tehran, valued at around 8.94 billion tomans, would be approximately $175,639 USD.
In the Ozgol neighborhood of District 1, a 60-square-meter apartment priced at 8.7 billion tomans equals roughly $170,923 USD.
In the Yaft-Abad neighborhood of District 18, a 20-year-old apartment priced at 1.9 billion tomans is around $37,331 USD.
(Hemat = 1,000 Billion Toman)Â
(Note: 1 Toman = 10 Rials)
Disclaimer: The views and opinions expressed in these emails are those of the author and do not necessarily reflect the official policy or position of any organization. The information contained in these emails is provided for informational purposes only and should not be taken as investment or financial advice. While the author has made every effort to ensure the accuracy of the information provided, errors and omissions may occur. The author will not be liable for any errors or omissions or any actions taken based on the information provided in these emails. It is the responsibility of the reader to do their own due diligence and seek the advice of a qualified professional before making any financial decisions.
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