Spatial heterogeneity in housing price-transaction ratios: a historical analysis of Tehran

Purpose: This study aims to explore the intricate relationship between housing prices and transaction volumes in Tehran, a city with diverse socioeconomic and regional characteristics. This research addresses a critical gap in understanding the role of local spatial factors, which previous studies have often overlooked, focusing instead on macroeconomic variables. Design/methodology/approach: Using a data set of housing transactions of Metropolitan Tehran from 2010 to 2020 sourced from secondary data, this study uses generalized linear mixed models and spatial clustering techniques. These methods enable an examination of geographical clustering and the effects of local contextual variables on the dynamics between housing prices and transaction volumes. Findings: Results indicate significant spatial heterogeneity within Tehran’s housing market. Higher prices and transaction volumes are concentrated in the northern and western regions, influenced by factors such as employment rates, rental housing supply and the physical attributes of the housing stock. The findings suggest that macroeconomic policies alone are insufficient to address housing challenges in Tehran; targeted, localized interventions are necessary. Research limitations/implications: This study’s reliance on secondary data and its focus on a single urban environment may limit the generalizability of the findings. Further research incorporating a wider range of local and macro variables could strengthen the applicability of the results across different contexts. Practical implications: This study underscores the need for region-specific housing policies that consider local economic, social and spatial conditions. Policymakers could improve housing affordability and accessibility in Tehran by implementing tailored strategies to address the distinct needs of different districts. Originality/value: This study offers a novel perspective by integrating spatial and contextual factors in housing market analysis, providing insights that challenge the traditional macroeconomic focus. The use of advanced statistical and spatial analysis techniques contributes to a deeper understanding of urban housing market dynamics.