There are a total of 22,825,046 residential units (excluding residential units uninhabited and secondhome) in Iran. An important part of units is considered as small housing and 31.4% of which are less
than 75 meters. In the meantime, the share of units of 50 to 75 meters of the total residential units is
21.7% and the share of units is less than 50 meters, equivalent to 9.7%. Shrinking household size, on the
one hand and high housing prices, on the other hand, have boomed the “small” housing market. There
are 2,587,607 vacant residential units in Iran. Over the past five years, the number of vacant houses was
1,663,000 units, which means, 924,000 apartment units have been added to residential units in the year
ended March 2012. Of all residential units, 39.3% are apartments and 60.7% are non-apartment. There
are also 24,196,000 households, 1,371,000 of which are not homeowners. Additionally, 2,870,000
residential units were added, between 2011 and 2017. Of these, 91.4% were apartments and 8.6% were
non-apartments. According to statistics, 79.2% of the rural residents
Since 2013, the number of construction permits issued by the municipalities has followed a downtrend
to 32% until the year ended March 2015, which continued to the year ended March 2016, as the
number of construction permits reached 102,000, down from 13.4% in the year ended March 2015.
However, the decline in the number of construction permits issued by municipalities in the metropolitan
areas in the year ended March 2017stopped and amounted to about 114,000 permits and grew by
12.1%. Considering the prospect of the issued construction permits, the growth of this variable in the
year ended March 2017 would be one of the signs of increasing the private sector investing in the
construction sector in the year ending March 2018 and avoiding from the five-year recession in this
Private Sector Investment in New Urban Areas
The GDP ratio to the private sector investment in the construction was about 10%, during 1959-2017,
while in the year ended March 2017 it was about 14% and over the past four years has always been
above the average rate. This means that the return of this proportion to its average amount will require
a significant increase in private sector investment in the construction. The private sector invested in new
buildings in urban areas, about 602,000 bn IRR, in the year ended March 2017. This investment declined
to 14.1% compared to year ended March 2016. Over the past four years, the number of just started
buildings by the private sector in urban areas has been decreasing from 95% in the year ended March
2012 to almost 90% in the year ended March 2016.
Investment Advantages and Potential
– Iran is keen on attracting capital in residential buildings and construction projects, if realized, will
subsequently lead to economic growth and a dramatic improvement in employment indicators.
According to the World Bank on July 2015, the entry of FDI into the construction sector and its effect on
employment is 10 times higher than investment in other areas in Iran. The construction sector in Iran is
a private industry.
– Production capacity of 80 mn tons of cement as one of the major materials.
– Construction materials abundance.
– Owning 80% of the ceramic tile market, manufacturers have gained a good experience in the Iraqi
– Raw material supply from 80% to 95% and thousand years history in the production have made this
industry less competitive in the region.