- Construction in Iran
In recent years, Iran's construction market has been thriving due to an increase in national and international investment to the extent that it is now the largest in the
Middle Eastregion. The Central Bank of Iranindicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market. [ [http://iran-daily.com/1385/2740/html/economy.htm Iran Daily - Domestic Economy - 12/23/06 ] ] [ [http://iran-daily.com/1386/2812/html/economy.htm Iran Daily - Domestic Economy - 04/09/07 ] ]
The annual turnover in the construction industry amounts to US$38.4 billion. 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. In addition, Iran’s geographical position over a
seismicbelt necessitates the reinforcement and renovationof housing. This is possible only through a boom in real-estate development and foreign investment.
Restoration 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 per cent of the funding while the rest will be supplied by public investment and bank loans.
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 sectorinvestment. There is little red tape or hurdles and, as a result, through launching mass development projects, the use of new technologiesand fast-pace project execution, a larger portion of the housing market is accessible. This is also true for new construction materialsand technological advances. Thousands of foreign firms, mainly Chinese or European, have established agents in Iran or partnerships with domestic manufacturers, both investing directly in the housing market and targeting other Persian Gulfmarkets.
Facts & Figures (2003)/(1379-1380)
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.
*Iranian year 1379: 60m square meter of buildings have been constructed
*Construction is mainly concentrated on
urban areas and Tehran
*1379: approx. 170,000 new urban construction
*1379: investment of $3.6 bn into urban housing
Bank: US$ 1.3 bn for 217,000 loans
*1379: 9,000 establishment
permits for new industrial units plus expansion;
*1379: 3,236 operation permits;
*Development budget 1380: $ 6.7bn (US$ 3bn construction, US$ 1.7bn machinery, US$ 2bn Others)
*Iran is among the world's largest dam builders [ [http://iran-daily.com/1385/2720/html/economy.htm Iran Daily - Domestic Economy - 11/29/06 ] ] .
cement(2m MT export), steel, tiles, stones, fixtures, etc.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 .
*Despite increase in budget: insufficient support of
*Specifically: lack of mass housing due to sharp increase of urban population
*Lack of financial facilities
*Government/municipalities taking active steps to encourage private and
*Introduction of housing bonds
*Emphasis on private sector; governmental companies to large extent bared from urban housing projects
*Government puts main emphasis of unfinished projects
Opportunities for foreign companies:
*General: Iran has capable construction and
engineeringcompanies; social status of engineers; smaller housing projects: bad quality
*Large projects (
dams, tunnels, industrial projects, oil industry)
*Joint projects in
Irak, Afghanistan(past: limited extent in Azerbaijan)
*Requirements: Foreign financing required (ECGD)
*Team up with local
partnersrequired; local contentThe 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
CustomsOffice, Iran’s major imported items include:
ironand steel(iron slabs and steel, iron and steel bars, rolled iron and steel wares)
*block and tackle
*hygenic products made of plastic and china
plasterand cementOther imported items are: glass, timber flooring, lighting, paint, electrical and electronic fittings and accessories, lock, key hardware and aluminumfor façade design.
Economy of Iran
Transportation in Iran
List of reservoirs and dams in Iran
Water supply and sanitation in Iran
Earthquakes in Iran
Health care in Iran
* [http://www.austrade.gov.au/Construction-to-Iran/default.aspx Construction to Iran- Australian Trade]
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