Arab Today, arab today tehran last resort squeezed by sanctions
Last Updated : GMT 21:35:56
Arab Today, arab today
Arab Today, arab today

Tehran: Last resort squeezed by sanctions

Arab Today, arab today

Arab Today, arab today Tehran: Last resort squeezed by sanctions

Tehran - Arabstoday

Mehdi Eslamipour stands amid piles of bricks and abandoned furniture at a Tehran building site where his company just knocked down a three-storey villa to build an apartment block. “Everyone’s looking to build,” he says, pointing to three similar projects on the same street. Iranians are turning to real estate to protect savings, helping fuel a building boom in the capital, as international sanctions weaken the rial and the government curbs foreign- currency and gold purchases. Eslamipour is planning a nine- storey block of 15 apartments on the 700 square-meter plot (7,500 square feet) of land in northern Tehran. He says it will cost 100 billion rials ($8.1 million.)Iran’s economy is being squeezed by tougher sanctions imposed this year by the U.S. and European Union, which say they are needed to restrain the Islamic republic’s nuclear program. Iranians stepped up purchases of gold, dollars and euros as hedges against the threat to stability. Those avenues were closed off as authorities banned currency trades outside official venues and made investors wait months to buy gold -- leaving the real estate market as an alternative. Building permits issued in Tehran jumped 87 percent in the June-August period from a year earlier, statistics from the mayor’s office show. Prices have risen at least 15 percent in the past three months, according to three real estate agents based in the capital. Tehran is more than twice as expensive as Istanbul, a similar-size city in wealthier neighboring Turkey. Ten Times Richer “After the fluctuations in the gold and currency markets, the real-estate market has started to move again, and this shows the direction of liquidity,” said Mousa Ghaninejad, an independent Tehran-based economist. “People feel the value of their money is dropping, so they want to switch to something that is a fixed asset.” The average cost of residential property per square meter in Tehran is about 20 million rials ($1,600) and about 120,000 transactions on average are made every year, according to the Donya-e-Eqtesad newspaper, citing official data. In affluent northern Tehran where Eslamipour is building, prices can rise to about 150 million rials per square meter. The average city-wide price in Istanbul as of January this year was $771 per square meter, while in Dubai -- whose per- capita income is about 10 times Iran’s -- it was $2,441, according to ReidIn, a real estate company that compiles price indexes and has offices in both cities. ‘Directed to Property’ “When there is devaluation, money is usually directed to property,” said Ramin Rabii, the managing director of Turquoise Partners, a Tehran-based investment firm. He predicts further gains in property prices this year. The last boom in Tehran house prices was in 2007 and early 2008, when high oil prices spread liquidity through Iran’s economy and banks offered cheap loans, according to Rabii. Prices plunged more than 30 percent from the summer of 2008, when the global economic crisis sparked a slump in oil prices, to mid-2009, according to a July report by the International Monetary Fund that tracked data through the end of 2010. Iran has a state-owned lender, Bank Maskan, that specializes in housing loans, which account for 28 percent of credit in the banking system, according to the IMF. State home loans are capped at about 180 million rials ($15,000), so Iranians typically use savings and money borrowed from friends and family to pay for homes mostly in cash, Rabii said. The latest U.S. and European sanctions are targeting Iran’s oil industry and transactions with its central bank. One result was a plunge in the rial’s value early this year, as Iranians concerned about the economy’s stability rushed to protect their savings by buying foreign currency. ‘Everything Has Increased’ The central bank raised interest rates on savings accounts and on Jan. 28 announced a fixed rate of 12,260 rials per dollar, a devaluation of about 8.5 percent. Authorities barred transactions in unofficial currency markets where the rate had soared to almost twice that level. The currency squeeze has pushed prices higher throughout the economy, adding to inflationary pressures caused by the removal of government subsidies. Inflation is above 20 percent, according to central bank figures. “Raw material, labor, transport, the cost of everything has increased,” said Raymond Vartanian, director of the Robinson real-estate agency in the Mirdamad suburb of Tehran. “Owners of property are revising their prices upward. They’re afraid that if they sell today for the purpose of getting a bigger space tomorrow, they may still be short of cash in their next transactions because of inflation.” No Italian Tiles For builders, the costs of many of the goods they need are rising, while others aren’t available. Eslamipour said he can’t get hold of Italian ceramics for apartments, and is forced to buy lower-quality substitutes from China. “These days, goods that are available are mostly from Asia,” he said. Looking down the road at the potential rivals to his own apartment block, Eslamipour forecasts that in two years, when current projects are all on the market, supply may exceed demand. Still, Iran’s youthful population, growing at 1.24 percent a year according to the country’s statistics office, supports the construction surge. The government has taken measures to prevent speculation in property, barring the resale of homes within fixed time limits. That means demand is now coming from long-term buyers instead of speculators who pushed prices up before 2008, according to Delta real-estate agency, one of Tehran’s largest. Still, expectations that prices will continue to rise are rooted in the culture, economist Ghaninejad said. “When it comes to property, there’s always been a saying that land is gold,” he said.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today tehran last resort squeezed by sanctions Arab Today, arab today tehran last resort squeezed by sanctions

 



Arab Today, arab today
Arab Today, arab today Ideen Belmahdy happy to be part of “ Fashion Star”

GMT 17:00 2017 Sunday ,26 February

Ideen Belmahdy happy to be part of “ Fashion Star”
Arab Today, arab today Tourist guide explains types of tourism

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars

GMT 14:44 2017 Saturday ,25 February

China overtakes US as Germany’s top trade partner

GMT 05:53 2017 Saturday ,25 February

Global sovereign debt to hit new all-time high

GMT 05:17 2017 Saturday ,25 February

Oil world cautious on Trump’s next move

GMT 09:59 2017 Friday ,24 February

Baidu revenue slips anew amid ad clampdown

GMT 05:20 2017 Thursday ,23 February

WTO ratifies first multilateral trade deal
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Ola Ghanem hopes to work with M.Ramadan

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 13:47 2017 Friday ,24 February

Rabia Fatima reveals role of "Facebook" in her career

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday