Half of Tehranians’ income is spent on housing

According to Eqtesadonline, quoted by ISNA, the Ministry of Roads and Urban Development, which has just started the process of presenting national housing statistics, in a new report presents the trend of housing developments based on macroeconomics and indicators such as fluctuations in housing prices and currency, value added share. Housing and the share of the housing sector in household spending.

This report shows that in the 10-year period between 2009 and 2009, the share of the housing sector in household expenditures reached its highest level of 36%, which has increased by 3.4% compared to 2009. This index for the city of Tehran in 2017 was equal to 49 percent. According to these statistics and the fact that housing prices have jumped since 2017, housing probably covers more than 49% of household expenses.

A few days ago, Mahmoudzadeh, Deputy Minister of Roads and Urban Development, announced in a press conference that the average price per square meter of housing in the country is 15.2 million Tomans, including Tehran with an average of 27.8 million Tomans and Ahvaz with an average of 23. 5 million Tomans, Shiraz 11.4 million, Isfahan, 11.4 million and Zanjan 10.9 million Tomans per square meter are the five most expensive cities in the country, respectively. Yasuj city in Kohgiluyeh and Boyer-Ahmad provinces with an average price of 3.2 million Tomans per square meter has the lowest price among the cities of the provincial capitals.

Recently, the Housing Economics Office affiliated to the Ministry of Roads and Urban Development has presented a report on housing market developments based on macroeconomics, which indicates that the share of value added in the housing sector has decreased to 4.7 percent from 2009 to 2009. Also, private sector investment in Tehran and in all urban areas of the country had a downward trend from 1992 to 1995 and has been slightly upward since 1995.

Statistics in the private sector investment sector in residential buildings show that in 2016 to 2017, the profit of housing production increased from 70 to 120, and in 1997 and 1998, the profit of housing production decreased to 64 and then 60% in two consecutive years, respectively.

The share of housing and construction in job creation in the country is low and has been declining. Reports indicate that the share of housing and construction in employment has decreased from 13.1% to 12.6% in the 10-year period between 2009 and 2009.

Housing price developments in Tehran are also upward. Studies show that the average price of housing transactions in Tehran is on the rise. So that the average price of housing transactions in Tehran in the first 8 months of 1998 was equal to 12 million and 617 thousand Tomans and in the first 8 months of this year this figure has reached 27 million and 828 thousand Tomans.

Housing price developments in Tehran also show a huge difference. According to the studies conducted in November of this year, the average purchase and sale of one square meter of a residential unit is equal to 59 million and 398 thousand Tomans in region one, and this figure is equal to 11 million and 904 thousand Tomans for region 18 of Tehran.

A study of the price bubble index in the housing market of Tehran also indicates a significant increase in rents. According to experts, one of the indicators of the price bubble in the housing market is the ratio of the average price to the average rent per square meter of housing. According to studies conducted since 2009, this index has increased significantly and has reached 23. In the first eight months of this year, it was equivalent to 37%, which is more than twice the long-term average. According to statistics, the long-term average of this index for the city of Tehran is 18.

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