The construction industry of Iran is divided into two main sections. The first is government infrastructure projects, which are central for the

cement industry A cement is a binder, a chemical substance used for construction that sets, hardens, and adheres to other materials to bind them together. Cement is seldom used on its own, but rather to bind sand and gravel ( aggregate) together. Cement mi ...

. The second is the

housing Housing, or more generally, living spaces, refers to the construction and assigned usage of houses or buildings individually or collectively, for the purpose of shelter. Housing ensures that members of society have a place to live, whether i ...

industry. In recent years, the construction industry has been thriving due to an increase in national and international investment to the extent that it is now the largest in the

Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabia (including the Arabian Peninsula and Bahrain), Asia Minor (Asian part of Turkey except Hatay Province), East Thrace (Europ ...

region. The

Central Bank of Iran The Central Bank of Iran (CBI), also known as ''Bank Markazi'', officially the Central Bank of the Islamic Republic of Iran ( fa, بانک مرکزی جمهوری اسلامی ايران, Bank Markazi-ye Jomhuri-ye Eslāmi-ye Irān; SWIFT Code: B ...

indicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market.Iran Daily – Domestic Economy – 12/23/06

Iran has three shopping malls among the largest shopping malls in the world. Iran Mall is the largest shopping mall in the world, located in Tehran. The annual turnover in the construction industry amounts to US$38.4 billion. The real estate sector contributed to 5% of GDP in 2008. Statistics from March 2004 to March 2005 put the number of total Iranian households at 15.1 million and the total number of dwelling units at 13.5 million, signifying a demand for at least 5.1 million dwelling units. Every year there is a need for 750,000 additional units as young couples embark on married life. At present, 2000 units are being built every day although this needs to increase to 2740 units. Iran's construction market will expand to $154.4 billion in 2016 from $88.7 billion in 2013.

History

For a decade after the

revolution In political science, a revolution (Latin: ''revolutio'', "a turn around") is a fundamental and relatively sudden change in political power and political organization which occurs when the population revolts against the government, typically due ...

, the land question, especially in cities, was among the most contested issues in the Islamic Republic. The collapse of state authority, coupled with the populist convictions of the new regime and spontaneous popular land occupations labeled as “revolutionary housing,” led to the dramatic expansion of cities.

Tehran Tehran (; fa, تهران ) is the largest city in Tehran Province and the capital of Iran. With a population of around 9 million in the city and around 16 million in the larger metropolitan area of Greater Tehran, Tehran is the most popul ...

doubled in size within two years, and

Ahvaz Ahvaz ( fa, اهواز, Ahvâz ) is a city in the southwest of Iran and the capital of Khuzestan province. Ahvaz's population is about 1,300,000 and its built-up area with the nearby town of Sheybani is home to 1,136,989 inhabitants. It is hom ...

tripled in area from . But only a small fraction of this geographic expansion was confiscated private land. The rest, more than 90 percent of the total distributed, had been public land. From 1979 to 1993 nearly half a million hectares of predominantly public unoccupied land was converted into private and cooperative residential property. New state institutions like the ''Urban Land Organization and the Housing Foundation'' played the key role in this massive transfer of property. By the mid-1980s more than 60 percent of all urban residential land transactions were being allocated by the state. This large-scale transfer of mostly public land, coupled with the absence of enforceable regulation, transformed Iran’s urban geography. Between 1979 and 1982, 75 percent of all new construction in Tehran occurred outside the formal city limits, where satellite villages were transformed into sprawling suburbs. Remarkably, by 1986 urban housing stock had doubled, as Housing Ministry surveys showed that more than half of all urban dwellings in the entire country had been built after the revolution. It was private individuals who built these 2.3 million new units. The state merely transferred the public land into private hands; its share of investment in housing construction (affordable or otherwise) was less than 2 percent of the total after the revolution. Following an extraordinary boom in the Iranian real estate market between 2004 and 2007, activity in this market suddenly slowed down from early 2008. In 2009, construction activity was at its lowest level for the past eight years. Since 2010, this sector has experienced a modest recovery.

Market

The

indicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market. The housing industry is one of the few segments of the Iranian economy where state capital shares as little as two per cent of the market, and the remaining 98 per cent is

private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The ...

investment. There is little red tape or hurdles and, as a result, through launching mass development projects, the use of new

technologies Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...

and fast-pace project execution, a larger portion of the housing market is accessible. This is also true for new construction

material Material is a substance or mixture of substances that constitutes an object. Materials can be pure or impure, living or non-living matter. Materials can be classified on the basis of their physical and chemical properties, or on their geolo ...

s and technological advances. Around 3 to 6 percent of housing units constructed yearly are solely for renting purposes. Around 20 percent of housing units in urban areas are rented. The average annual increase in house prices has been around 20 percent over the past ten years with a peak reached between 2006 and 2008. The average size of housing units has been around 80 square meters over the past five years. At present, the average price of a housing unit in urban areas is about 10 times the annual income of an urban household. Average construction cost for 1m² of urban

residential building A residential area is a land used in which housing predominates, as opposed to industrial and commercial areas. Housing may vary significantly between, and through, residential areas. These include single-family housing, multi-family resi ...

s in the first half of 2008 was $350 dollars. In January 2014, prices in

were $1275 per square meter. In 2011, Iran implemented a national electronic system for the registration and tracking of real estate transactions in order to bring more transparency to the market (97% of real estate transactions and ownership changes have been recorded in the new system).

Mehr Housing Scheme

Maskan e Mehr house project - Janbazan blv - Nishapur 3

Mehr project, designed in 2007, aimed to cover a part of house shortage through building of around 2 million housing units within 5 years.http://financialtribunedaily.com/articles/2014/09/13/economy-domestic-economy/427/gov%E2%80%99t-revise-housing-projects As of January 2011, the banking sector, particularly Bank Maskan has given loans up to 102 trillion rials ($10.2 billion) to applicants of Mehr housing project. Under this scheme real estate developers are offered free lands in return for building cheap residential units for first-time buyers on 99-year lease contracts. The

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is ...

then commissioned agent banks to offer loans to the real estate developers to prepare the lands and begin construction projects in an attempt to increase production and create equilibrium in the supply and demand curve (2008). Close to 400,000 units have been built and permits have been issued for another 12,000. Mehr Housing project is expected to provide 600,000 residential units in its first phase. About 3.7 million people have so far registered for Mehr Housing Plan (2008). About 10 million rials is to be paid by applicants for preparing the land and another 10 million to be given by the government in the form of banking facilities. Applicants should pay about 20 percent of the construction costs. In addition, about 140 million rials worth of housing loans will be granted to them (10,000 rials=1 USD in 2008). While most Iranians have difficulties obtaining small home loans, 90 persons have managed to secure collective facilities totaling $8 billion from banks. Problems regarding lack of utilities has been reported for the project, including lack of access to water, power, gas, and sewerage lines. Starting in 2014, the Mehr housing scheme will be taken off the balance sheet of the

. The government of President Rouhani announced that by 2017 the ''Mehr housing project'' will be replaced with cheap loans to needy families with the stated objective to build only 150,000 homes on a yearly basis.

Restorations

Restoration Restoration is the act of restoring something to its original state and may refer to: * Conservation and restoration of cultural heritage ** Audio restoration ** Film restoration ** Image restoration ** Textile restoration * Restoration ecology ...

of old buildings is one of the priorities for the Government of Iran. Estimates show that about US$143 billion needs to be allocated in the next 10 years for restoration of 14,000 meters of critically decaying buildings. The government will earmark 11.5 percent of the funding while the rest will be supplied by public investment and bank loans (2007). The refurbishment of aged buildings nationwide has increased to $6.3 billion in 2010 from $3.3 billion in 2009. Another avenue for restoration in light of the new energy subsidy reform is to make housing more energy efficient in terms of heating. In addition, Iran’s geographical position over a

seismic Seismology (; from Ancient Greek σεισμός (''seismós'') meaning "earthquake" and -λογία (''-logía'') meaning "study of") is the scientific study of earthquakes and the propagation of elastic waves through the Earth or through other ...

belt necessitates the reinforcement and

renovation Renovation (also called remodeling) is the process of improving broken, damaged, or outdated structures. Renovations are typically done on either commercial or residential buildings. Additionally, renovation can refer to making something new, ...

of housing. This is possible only through a boom in real-estate development and foreign investment. The plan is to provide a number of 1.8 million loans over a period of 6 years (2014–2020) ranging between $7,500 and $18,700 each.

Real estate investment

The

sector plays an important role in the

economy of Iran The economy of Iran is a mixed economy with a large state-owned sector and is the largest in the Middle East in terms of nominal GDP. It is the world's 21st largest by purchasing power parity (PPP). Some 60% of Iran's economy is centrally pla ...

; it has links with 130 economic sectors, contributes to more than 20 percent of fixed

capital formation Capital formation is a concept used in macroeconomics, national accounts and financial economics. Occasionally it is also used in corporate accounts. It can be defined in three ways: *It is a specific statistical concept, also known as net inve ...

each year, constitutes 25 percent of the balance of loans in the banking sector, 33 percent of household expenses are housing expenses, and the housing sector contributes around 12 percent of employment to the economy. In terms of investment, the domestic rival markets of real estate market are gold, car and the Iranian bourse. Construction is one of the most important sectors in Iran accounting for 20–50% of the total private investment. One of the prime investment targets of well off Iranians as tangible. In Iran, only government employees pay their fair share of

income taxes An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Ta ...

and no one pays a

capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...

, which has allowed the rich to "squirrel away" their speculative real estate gains abroad. Prices for imported goods have increased somewhat along with global inflation but prices of non-tradables have increased at a much faster rate (with

's real estate prices increasing by about 1,500–2,000% icover the last 10 years), resulting in a highly overvalued currency and damaging Iran's competitiveness.

Mortgage financing

As of 2016, main

mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

lenders in Iran are: ;

Banks A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...

* Bank Maskan, ; Charities *

Housing Foundation of Islamic Revolution The Housing Foundation of Islamic Revolution ( fa, بنیاد مسکن انقلاب اسلامی) was established on April 10, 1979, by the order of Ruhollah Khomeini, the founder of the Islamic Republic of Iran, to provide housing for the depriv ...

, *

Imam Khomeini Relief Foundation The Imam Khomeini Relief Foundation (Persian: کمیته‌ی امداد امام خمینی) is an Iranian charitable organization, founded in March 1979 to provide support for poor families. The aim is to help such families regain financial stabi ...

, * State Welfare Organization of Iran.

Facts & figures

Housing

*2003: 60 mil. square meter of buildings have been constructed. Retrieved on 2012-07-16. *Construction is mainly concentrated on

urban area An urban area, built-up area or urban agglomeration is a human settlement with a high population density and infrastructure of built environment. Urban areas are created through urbanization and are categorized by urban morphology as cities ...

s and

*2003: approx. 170,000 new urban construction

projects A project is any undertaking, carried out individually or collaboratively and possibly involving research or design, that is carefully planned to achieve a particular goal. An alternative view sees a project managerially as a sequence of even ...

. Close to 3 percent of houses built inside the country are prefabricated. *2003: investment of $3.6 bn into urban housing *2003: Housing Bank: US$1.3 bn for 217,000

loans In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...

*Business Monitor International (BMI) forecasting a compound annual growth rate of 12.2 percent for 2008–2013. One of the main reasons for this growth is that there remains a severe shortage of housing stock in Iran wherein demand stands at around 1.5 million housing units per year, while only around 700,000 units are completed each year.

Industry

*2003: 9,000 establishment permits for new industrial units plus expansion; *2003: 3,236 operation permits; *Share of

industrial construction Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and co ...

in Iran: 3% (2005); 30% (2012). Iranian contractors have been awarded several foreign tender contracts in different fields of construction of

dams A dam is a barrier that stops or restricts the flow of surface water or underground streams. Reservoirs created by dams not only suppress floods but also provide water for activities such as irrigation, human consumption, industrial use ...

, bridges, roads, buildings

railroads Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a prep ...

, power generation, and gas, oil and

petrochemical Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable so ...

industries. The availability of local raw materials, rich mineral reserves, experienced manpower have all collectively played crucial role in winning the international bids.

Government

*Development budget 2004: $6.7bn (US$ 3bn construction, US$1.7bn machinery, US$ 2bn Others) *Iran is among the world's largest dam builders.

Construction materials

Part of the material is supplied by traditional markets such as the Tehran-based grand markets of iron and cement. *2003: 27mil. MT

cement A cement is a binder, a chemical substance used for construction that sets, hardens, and adheres to other materials to bind them together. Cement is seldom used on its own, but rather to bind sand and gravel ( aggregate) together. Cement mi ...

(2mil. MT export), steel,

tiles Tiles are usually thin, square or rectangular coverings manufactured from hard-wearing material such as ceramic, stone, metal, baked clay, or even glass. They are generally fixed in place in an array to cover roofs, floors, walls, edges, or o ...

, stones, fixtures, etc. Some 280 million square meters of tile and ceramic were produced in 2010. In 2014, Iran ranked fourth in the world in terms of tile and ceramic output with an annual production of 500 million square meters. *According to the Industries and Mines Ministry, the current cement production in 2006/07 is over 40 million ton which 13.5% increased comparing with 2005/06. As of March 2010, Iran’s total nominal production capacity stood at 62 million tonnes. Iran reached self-sufficiency in cement production in 2009. Iran now produces 200,000 tons of cement per day and plans to export 25 million tons of cement per annum by 2010. There are 57 active production units in Iran. In 2011, The Ministry of Commerce ratified a 14% increase in the price ceiling for cement products, which will have the effect of supporting share prices of this industry in the future. *The largest float glass factory in the Middle East is located in Qazvin Province and produces 120,000 square meters of glass from 1.2 to 19 millimeter thickness on a daily basis, or 180,000 tons of glass annually. 30 percent of the output is exported to Europe.

Problems

*2003: Despite increase in budget: insufficient support of

*Specifically: lack of mass housing due to sharp increase of urban

population Population typically refers to the number of people in a single area, whether it be a city or town, region, country, continent, or the world. Governments typically quantify the size of the resident population within their jurisdiction using a ...

*Lack of financial facilities

Latest development

*Government/municipalities taking active steps to encourage private and foreign investment *Introduction of housing bonds *Emphasis on private sector; governmental companies to large extent barred from urban housing projects *Government puts main emphasis on unfinished projects: Some statistics put the number of unfinished projects across Iran at about 50,000. *Reform of

technical standard A technical standard is an established norm or requirement for a repeatable technical task which is applied to a common and repeated use of rules, conditions, guidelines or characteristics for products or related processes and production methods, ...

s & regulations *Better statistics & transparencies

Opportunities for foreign companies

Thousands of foreign firms, mainly

Chinese Chinese can refer to: * Something related to China * Chinese people, people of Chinese nationality, citizenship, and/or ethnicity **''Zhonghua minzu'', the supra-ethnic concept of the Chinese nation ** List of ethnic groups in China, people of ...

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...

an, have established agents in Iran or partnerships with domestic manufacturers, both investing directly in the housing market and targeting other

Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a mediterranean sea in Western Asia. The bod ...

markets. *General: Iran has capable construction and engineering companies *Mass housing. In 2010, five foreign companies from

Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a transcontinental country located mainly on the Anatolian Peninsula in Western Asia, with a small portion on the Balkan Peninsula in ...

and

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. Its western border is formed by the Yellow Sea, while its eas ...

have concluded contracts to build 40,000 houses in Iran in relation to the "Mehr national housing plan". Previously, companies from

Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...

and

have won development contracts under the Mehr Housing project. *New technology *Large projects (

tunnels A tunnel is an underground passageway, dug through surrounding soil, earth or rock, and enclosed except for the entrance and exit, commonly at each end. A Pipeline transport, pipeline is not a tunnel, though some recent tunnels have used ...

, industrial projects,

oil industry The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The larges ...

). There are hundreds, perhaps thousands, of big tunnels in Iran. *Joint projects in

Iraq Iraq,; ku, عێراق, translit=Êraq officially the Republic of Iraq, '; ku, کۆماری عێراق, translit=Komarî Êraq is a country in Western Asia. It is bordered by Turkey to the north, Iran to the east, the Persian Gulf and K ...

Afghanistan Afghanistan, officially the Islamic Emirate of Afghanistan,; prs, امارت اسلامی افغانستان is a landlocked country located at the crossroads of Central Asia and South Asia. Referred to as the Heart of Asia, it is bordere ...

(past: limited extent in

Azerbaijan Azerbaijan (, ; az, Azərbaycan ), officially the Republic of Azerbaijan, , also sometimes officially called the Azerbaijan Republic is a transcontinental country located at the boundary of Eastern Europe and Western Asia. It is a part of t ...

) *Construction related machinery *Requirements: Foreign financing required ( ECGD) *Team up with local partners required; local content The Iran construction market is potentially ripe for the import of construction material to accommodate local demands. According to the statistics presented by the ''Iran Imports Book'', which is published by the Islamic Republic of Iran Customs Office, Iran’s major imported items in 2003 included: *Block and tackle * Cranes *Digging and excavation machinery *

Elevator An elevator or lift is a cable-assisted, hydraulic cylinder-assisted, or roller-track assisted machine that vertically transports people or freight between floors, levels, or decks of a building, vessel, or other structure. They a ...

wares *Hygienic products made of plastic and china *

Iron Iron () is a chemical element with Symbol (chemistry), symbol Fe (from la, Wikt:ferrum, ferrum) and atomic number 26. It is a metal that belongs to the first transition series and group 8 element, group 8 of the periodic table. It is, Abundanc ...

and steel (iron slabs and steel, iron and steel bars, rolled iron and steel wares) *

Plaster Plaster is a building material used for the protective or decorative coating of walls and ceilings and for moulding and casting decorative elements. In English, "plaster" usually means a material used for the interiors of buildings, while "re ...

and

*Pre-fabricated buildings *Road-building machinery *Stonewares Other imported items are:

glass Glass is a non-crystalline, often transparent, amorphous solid that has widespread practical, technological, and decorative use in, for example, window panes, tableware, and optics. Glass is most often formed by rapid cooling ( quenching ...

timber Lumber is wood that has been processed into dimensional lumber, including beams and planks or boards, a stage in the process of wood production. Lumber is mainly used for construction framing, as well as finishing (floors, wall panels, w ...

flooring Flooring is the general term for a permanent covering of a floor, or for the work of installing such a floor covering. Floor covering is a term to generically describe any finish material applied over a floor structure to provide a walking surface ...

lighting Lighting or illumination is the deliberate use of light to achieve practical or aesthetic effects. Lighting includes the use of both artificial light sources like lamps and light fixtures, as well as natural illumination by capturing daylig ...

, paint, electrical and

electronic Electronic may refer to: *Electronics, the science of how to control electric energy in semiconductor * ''Electronics'' (magazine), a defunct American trade journal *Electronic storage, the storage of data using an electronic device *Electronic co ...

fittings and accessories,

lock Lock(s) may refer to: Common meanings *Lock and key, a mechanical device used to secure items of importance *Lock (water navigation), a device for boats to transit between different levels of water, as in a canal Arts and entertainment * ''Lock ...

, key hardware and

aluminum Aluminium (aluminum in American and Canadian English) is a chemical element with the symbol Al and atomic number 13. Aluminium has a density lower than those of other common metals, at approximately one third that of steel. It ha ...

for façade design.

Industry standards

Manufacturers and suppliers are required to have

ISO 9000 The ISO 9000 family is a set of five quality management systems (QMS) standards that help organizations ensure they meet customer and other stakeholder needs within statutory and regulatory requirements related to a product or service. ISO 90 ...

certification in order to export to Iran. European Union standards (EN, BSI, DIN, ANFOR, UNI, NNI, ON, IBN, IPQ, DS, NSF, SEE, SIS, NSAI, ELOT), North America National standards (ANSI, ASTM, AGI, API), Japan National Standard (JIS) and International Standards (ISO, CODEX, ITU, IEC) are also accepted in order to export to Iran. Further information is available from the

Institute of Standards and Industrial Research of Iran The Institute of Standards and Industrial Research of Iran (ISIRI; ) is the Iranian governmental institution for standardization and certification. It is the Iranian representative to International Organization for Standardization. See also *I ...

References

External links

Annual Reviews
– Reports by the

, including statistics about the construction sector in Iran.
Iran Ministry of Housing and Urban DevelopmentList of projects open to foreign direct investment in Iran
(2010)
Ministry of Road & TransportationIran Trade Promotion OrganizationIran International Exhibitions Company
* (with useful links and resources)
Construction materials industry in Iran
–

Encyclopedia Iranica An encyclopedia (American English) or encyclopædia (British English) is a reference work or compendium providing summaries of knowledge either general or special to a particular field or discipline. Encyclopedias are divided into articles ...

Global Property Guide
Iran's entry with information on taxes and statistics ;Sepcialized reports

(80-page report)

* ttps://web.archive.org/web/20120423085248/http://www.reportbuyer.com/industry_manufacturing/construction/doors_windows/windows_iran.html Windows in Iran: Global Research & Data – 2011br>Pipes and fittings market in Iran
(2013) {{Construction overview Industry in Iran Iran articles by quality Iran articles by importance