Iran Real Estate market overview

I have sent these info to Gulf News freehold weekly to be published after modifications. you may find it interesting also:

Iran's real estate market, a general overview
Prices: In Iran there’s a traditional thought of “real estate prices never fall!” people believe price are going on a step schema always, rising, fixing at some price and again rising. But the world crisis in property and real estate sector and also the past two years bubble that happened in Iran’s real estate market, have made a big impact on prices in major cities like Tehran, Tabriz, Mashhad and Isfahan.
A luxury apartment in north of Tehran in early 2006 was about 2000 USD per sq meter, grew up to 8000 USD in early 2008 and back to 5000 USD now. (an estimation for locations like Velanjak, Shahrak, Zafaranieh etc)
The main reasons making this bubble were:

- Rising cost of fuel and construction
- Being in a recession of past 5 years which the prices haven’t raised
- New loans issued by governmental banks (Maskan Bank)
- Inflation

Demand: the demand for apartments have always been beyond production in Iran. Especially low/middle income class people, who earn less than 500 USD per month each family, have been in this struggle always.
The government section, Mehr Found, has declared a new series of mass development for this class, constructing more than 100,000 flat in small cities near Tehran, on West, East and South in the next 50 months. The prices of such apartments would be lower than 1000 USD per sq meter.

Rent ratio:
Rent ration is low in Iran comparing to other GCC countries. If you consider the rate 10-12 percent of the value in Dubai, in Tehran you can rent for 5% and lower for other cities. But even these rent ratios are high for most of people comparing to their income.
There are statistics in Tehran that shows 20% of the properties are empty and this causes a problem also. government is about to put more taxation on empty property’s owners to let the rents come lower.

Valuation methods:
Appraising and Valuation practices in Iran are being generally made with experiences, subjective and uncontrolled by different profession member and legal formations. In Tehran the range of prices can vary from 1500 USD up to 20 times more per square meter. A property can be from 50,000 USD up to 50 billion USD!

Overall:
Like many other developing countries suffering from inflation, in Iran real estate has become an assurance and annuity item because of economy’s structure and lack of protection of savings against inflation.
Because of these specs, Iran’s Real Estate Market was widely open to the speculative effects especially to the impacts of economical and political decisions over past years, but now government is controlling the mass impacts and effects on the market for the middle and low class people. Beside this, Luxury constructors are following a different story and guidelines, where people are ready to pay any price for it.

Free hold property in Iran
Foreigners cannot buy property in Iran without diplomatic concerns and permissions. But there possibilities of registering 100% ownership companies in free zones like Kish Island and buy the property in its legal identity name.

Two sample projects in Iran - Tehran right now:
Tehran International Tower (commercial, office and residential): 220,000 square meters, 54 floors, 572 residential apartments from 40 up to 500 sq meters. 43 studio, 172 2-bedroom, 313 3-bedroom, 16 four bedroom, 17 duplex and 11 triplex

Millennium residential tower: 34 floors, 728 residential units, 92 commercial units

Other cities prices:
Kish Island: 2000 USD per sq m to 3000 USD
North of Iran: land: 200 USD up to 800 USD – apartment: 1000 USD to 3000 USD per sq m

mortgages are available only for native people with Iranian ID. There are two types of loans: Loans by governmental and private banks
Governmental banks have limited loans (right now up to 25,000 USD for a house built less than 10 years) the interest rate is roughly 11%
Private banks have no limit in loans, they usually lend up to 70% of the value of the property. The interest rate is roughly 24%

you can ask for any further information:
emad @ irxp . com
to Buy/sell/rent property in Iran visit here