VZCZCXRO6850
PP RUEHBC RUEHDE RUEHKUK
DE RUEHDIR #0024/01 1151133
ZNY CCCCC ZZH
P 241133Z APR 08
FM IRAN RPO DUBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0266
INFO RUCNIRA/IRAN COLLECTIVE
RUEHDIR/IRAN RPO DUBAI PRIORITY 0259
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHAAA/NSC WASHINGTON DC
RUEHDE/AMCONSUL DUBAI PRIORITY 0230
RUEHAD/USDAO ABU DHABI TC
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0198
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 IRAN RPO DUBAI 000024 
 
SIPDIS 
 
SIPDIS 
 
ECON, PGOV, PREL, SOCI, IR 
 
E.O. 12958: DECL:  4/24/2018 
TAGS: ECON PGOV PREL SOCI IR
SUBJECT: IRAN:  HOUSING PRICES IN TEHRAN AND OTHER MAIN CITIES 
(C-NE7-01996) 
 
REF: A. RPO DUBAI 0006; B. RPO DUBAI 0023 
 
RPO DUBAI 00000024  001.2 OF 002 
 
 
CLASSIFIED BY: Ramin Asgard, Acting Director, Iran Regional 
Presence Office, Department of State. 
REASON: 1.4 (b), (d) 
 
 
 
1.(C) Summary:  Northern Tehran has seen vast development in the 
past three years and housing prices have almost tripled, 
according to anecdotal comments from several Iranians passing 
through Dubai.  The northeastern quadrant of Tehran, 
particularly the northernmost Shemiran district is the most 
expensive, with prices comparable to prices in Bethesda, 
Maryland.  The provinces have reportedly experienced a more 
gradual rise in property values, and generally have much lower 
prices than Tehran.  All sources claimed that housing is 
unaffordable for the average wage earner throughout the country. 
 End summary. 
 
Tehran property prices 
 
---------------------- 
 
2.(C) Real estate in Tehran is generally divided into the 
affluent northern section and the more modest central and 
southern parts.  According to a Tehran-based construction 
company owner and several visa applicants, currently the city's 
highest valued properties are in the northernmost district of 
the city, district One, also known as Shemiran.  And on the 
whole, districts One to Four in the upper northeast (Shemiran 
and its three surrounding districts) are highly regarded and 
have escalated the most in value.  This section apparently also 
has cleaner air as the winds blow the pollution away to the 
east, according to a visa applicant. 
 
3.(C) Shemiran, at the very north/slightly northeastern edge of 
the city, contains the most expensive neighborhoods such as 
Elahieh, Farmanieh, and Mahmoodieh.  This is Tehran's most 
fashionable and vibrant district, and has seen feverish 
development in the past few years.  Its neighborhood of Elahieh 
is where the newest buildings, top-end shops, trendy cafes, and 
many fashionable locals can be found.  It contains the 
clubhouses of the German, Swiss, Belgian, and several other 
embassies and the well-known Fereshteh Avenue.  One Iranian 
contact, however, told IRPOFF that not everybody considers this 
part of town desirable, since the traffic often gets gridlocked 
on summer nights and the social atmosphere is "rather snobby." 
A visa applicant recently reported that a two-bedroom apartment 
in Elahieah can cost from 600-800 thousand dollars (600-800 
dollars per square foot), up from 200-400 thousand dollars 2 
years ago.  Even renting in Shemiran is challenging; adding that 
you need connections just to find these apartments and 
influential references to secure them.  Rent for a basic 2 
bedroom apartment starts at about 1500 dollars and can much 
higher, based on the amenities the buildings offers. 
 
4.(C) Prices drop by about 30 percent as you move to districts 
Two to Four  adjacent to Shemiran, (generally 200-300 dollars 
per square foot).  District Two holds the upscale neighborhood 
of Sa'adatabad, the modern and upscale Shahrak-e gharb, and 
Gisha.  Gisha is where Borj-e Milad, the world's fourth tallest 
tower now stands, and also where many affluent youth interact, 
according to a visa applicant.  There are also many affluent 
areas in districts Three and Four such as Vanak, Jordan, and 
Pasdaran, which used to be prized, but today the majority of 
these areas have become suburban and less chic.  Average 
property in Vanak now costs about 210 dollars per square foot, 
according to the Tehran-based construction company owner, and an 
upscale two bedroom apartment in these nice areas sells for 
approximately 350 to 450 thousand dollars.  Another visa 
applicant said that districts Five, Six, and Seven are also in 
the same range as districts Two to Four, and that this entire 
area is still undergoing rapid development. 
 
5.(C) As you move away from the northeastern quadrant of Tehran 
property prices drop more - with property prices in the western 
regions of the city (districts 21, 22) starting at about 200 
dollars per square foot and the in the southern part of the city 
from around 150 dollars per square foot. 
 
Housing in the provinces 
 
------------------------ 
 
RPO DUBAI 00000024  002.2 OF 002 
 
 
 
6.(C) Desirable real estate in major cities outside Tehran 
appears to be much less expensive.  According to visa applicants 
from provincial areas, the provinces have experienced gradual 
property value increases over the past 10 to 15 years, but with 
steeper increases in the past two years.  They shared Tehranis' 
views that buying property these days is like buying insurance, 
adding that the wealthy are buying entire apartment buildings or 
land and build buildings which they then rent out.  They 
portrayed their cities' housing situations: 
 
-- Esfahan -- Housing prices have gone up about three times over 
the past 15 years, but the sharpest rise happened in 2007, when 
prices rose some 30 percent.  A nice property in the outskirts 
of the Zand-e Rud river south of Darvaze Shiraz would cost about 
200 dollars per square foot, but northern Esfahan and the 
outskirts are cheaper. 
 
-- Shiraz -- Prices have doubled in the past two years; 
according to one visa applicant, a 1000 square foot apartment 
now costs about 150 thousand dollars to buy and about 600 
dollars to rent. 
 
-- Mashad -- Property prices are about 200 dollars per square 
foot in an above average area such as Sajjad Boulevard or 
Ahmadabad. One visa applicant's apartment that was valued at 100 
thousand dollars four years ago is now valued at 500 thousand 
dollars. 
 
-- Tabriz -- Prices have gone up 50 times in the past 10 years. 
Ten years ago land was practically free in Tabriz, five years 
ago prices started to increase rapidly, especially in northern 
Tabriz. 
 
-- Kerman -- Real estate prices here are about one fourth of 
Tehran. 
 
-- Kermanshah -- Housing prices are about one-fifth of prices in 
Tehran.  Prices have gone up quickly in the past few years, 
particularly in 2007, which saw as much as a 30 percent rise. 
An apartment that rented for 220 dollars in 2006 was 300 dollars 
at the end of 2007. 
 
-- Ahvaz -- Prices are about one-sixth of Tehran prices. 
Contacts report prices have gone up ten times in the past 3 
years. 
 
7.(C) Comment:  Iranian contacts involved in building 
construction and Iranian visa applicants eagerly shared their 
thoughts on the housing situation.  Their comments demonstrate 
the challenges facing the general population as the privileged 
few profit.  The drastic increases in urban housing costs over 
the past three years likely reflect increased wealth 
attributable to high oil prices, as well as much higher 
investment returns compared to manufacturing and other more 
productive investments.  In addition, heavy Iranian investment 
in expensive real estate in Dubai and elsewhere in the Persian 
Gulf region suggest that this phenomenon is not limited to 
Iranian cities.  End comment. 
ASGARD