Uptick in Housing Starts Raises Recovery Hopes

According to official data, the volume of residential real-estate deals in the city of Tehran during the eight months has climbed by 9%

The Iranian housing market is on a slow but steady path to escape its lingering recession with as an uptick in housing starts and heralds better days for the key sector.

According to Ali Chegini, managing director of the Planning and Economy Office at the Ministry of Roads and Urban Development, housing starts have climbed close to 1% in the first half of the Iranian year (started March 20, 2016).

"Housing starts also experienced a rise and increased by 0.8% in the first six months of the current fiscal year year-on-year and the negative growth in the housing sector has since become less severe, all of which heralds a gradual exit of the housing sector from recession," Chegini said in a talk with ILNA.

"The rate of investments in the housing market on the whole has inched up."

Pointing out that the construction sector has been stagnant for the past three years, the official said the decline is normal.

"Considering the boom-and-bust cycle in the [housing] sector and also because of lackluster investment in the housing sector in 2010-13 and the economic downturn as a whole, this recession seems natural to a certain degree," he said.

Chegini added that according to official data, the volume of residential real-estate deals in the city of Tehran during the eight months has climbed by 9%.

Hesam Oqbaei, the head of Tehran Association of Realtors, criticized lack of credible data for real-estate agencies, saying it is a factor behind the high risk of real-estate deals in Iran.

"The risk of dealing in homes in Iran is high and even I am scared to buy a home. One of the main reasons behind this high risk is that realtors have no access to good information," he said.

Noting that it is imperative for the realtors to be able to access information sources in order to reduce that risk, Oqbaei stressed the necessity of "having access to official data and linkage to public notaries and other relevant bodies."

The official also said he is hopeful that the next summer would usher in "the spring of housing market".