Identification and analysis of housing submarkets in Tehran City

Housing Submarkets are a set of dwellings that have similar characteristics. They are reasonably close substitutes for one another, yet relatively poor substitutes for dwelling in other submarkets. Identifying housing sub-markets makes it possible to predict housing prices more accurately. Moreover, it helps planners and policy-makers to make better decisions. Despite the importance of this issue, few studies have analyzed housing sub-markets in developing countries. In this article, spatial analysis of housing sub-markets in 22 districts of Tehran City has been considered. The results of two stages of factor analysis on 22 variables consisting of housing structure and characteristics of housing supply and demand variables show a significant relationship between 21 variables. These variables have been reduced to 6 factors: price and ownership of housing, ability to provide housing, land and housing supply, spatial characteristics, environmental characteristics, and welfare status of households. Then, the districts of Tehran are divided into 5 clusters of the housing sub-market by cluster analysis. Comparing sub-markets confirms significant differences in variables between sub-markets. For example, the average price per square meter of a residential unit in sub-market 1 including Zones 1, 2, and 3 is 5.7 times of sub-market 5 includes Zones 19 and 21.