The Iranian year 1399 (2020 to 2021) was an instructive year for Iranian investors, but few read its lesson correctly. That year two large asset markets, stocks and housing, peaked at the same time, and one of them then collapsed quickly. Today, in Tir 1405 (July 2026), the picture is almost inverted. The thesis of this report is one sentence: that year what stood at its peak was the price; today what stands at its peak is the risk. A cheaper asset is not a safer asset, and that is exactly the point the buyer at the 1399 top learned too late.
Framework: seven systematic-risk factors that shape both markets
Before comparing prices, you have to see the systematic risk, the factors both stocks and housing breathe under. In Tir 1405 they are: the free-market dollar between 186,000 and 194,000 tomans (nearly double a year earlier, and around 189,000 tomans on Sahmino's price feed near midday on 20 July); year-on-year inflation of 83.1 percent per the Central Bank and 88.6 percent per the Statistical Center; a yield to maturity on treasury bills (Akhza) around 40 percent; money-supply growth near 56 percent; administered pricing across parts of industry; energy imbalance (power cuts of up to 85 percent for industries such as cement in Tir and Mordad); and accumulated geopolitical risk: the twelve-day war of Khordad 1404, the snapback mechanism triggered on 6 Mehr 1404, the roughly seventy-day closure of the bourse, and the Strait of Hormuz tensions alongside the Doha talks. That list alone shows why today's price cannot be read without a risk lens.
The 1399 story: two interlocked bubbles
In 1399 the Tehran All-Share Index climbed in about five months from near 508,000 to more than 2.1 million units, a jump of roughly 305 percent. The market P/E passed 35 and the total dollar value of the market reached 356 to 427 billion dollars at the top. The decline began on 20 Mordad 1399, and millions of newly arrived shareholders were caught on the way down. At the same time some of that liquidity spilled into housing: the price per square meter in Tehran rose from about 15 to nearly 30 million tomans, a year-on-year jump of 91.7 percent in Shahrivar 1399, exactly as transaction volume fell to about 2,855 deals in Mordad. That year the price was at its peak.
Today's picture: Tir 1405
Today the frame is nearly reversed. The All-Share Index is around 4.8 million units, but the market P/E has fallen from 8.8 to about 6.4, with a forward ratio near 5.8, while corporate earnings have grown roughly 110 percent year on year and the market's dollar value has slipped from 111 to about 85 billion dollars. In other words the market is cheaper in dollars and less stretched against realized earnings than usual. On the housing side, the price per square meter in Tehran has reached about 191 million tomans (near 1,000 to 1,020 dollars), close to the long-run dollar average, but the market is frozen: transactions about 80 percent below normal periods (near two thousand deals a month), building permits 25 to 34 percent lower, construction-sector value added at minus 15.8 percent, build cost of 40 to 51 million tomans per meter, and a rental yield around 4 percent.
Combined table: 1399 versus Tir 1405
| Measure | 1399 (peak) | Tir 1405 |
|---|
| Bourse price-to-earnings | above 35 | about 6.4 (forward 5.8) |
| Total market dollar value | 356 to 427 billion dollars | about 85 billion dollars |
| Tehran price per square meter | about 30 million tomans | about 191 million tomans (near 1,000 dollars) |
| Housing transactions | price jump, volume drop (2,855 deals) | frozen, down about 80 percent |
| Free-market dollar | a lower base | 186,000 to 194,000 tomans |
| Risk-free yield (Akhza) | lower | about 40 percent |
Which is better value, which is riskier?
Reading these two columns together gives a decision framework, not a buy or sell signal. Today's bourse is a deep discount with a high geopolitical beta: cheap on the surface, but its swings are tied to every war and negotiation headline. Housing is fair in dollars but locked; its price-to-rent ratio sits near 25, the top of the usual 15 to 25 band, and leaving that band is not easy because buyers are scarce. And treasury bills, yielding around 40 percent, are the low-drama short-term king of this field. Three scenarios lie ahead: a cold peace (the status quo, high and directionless volatility), a renewed war (pressure on both markets and a flight to dollars and gold), and an agreement (money returning to the bourse and the housing transaction lock breaking). Each scenario moves the two markets differently.
A few things retail investors less often know
- The dollar anchor: the buyer at the 1399 bourse top, despite rising nominal figures, lost about 75 percent in dollars; the buyer at the housing top lost near one third. Nominal return is not real return.
- Return versus the risk-free rate: the bourse earnings yield and the housing rental yield (around 4 percent) should be weighed against the roughly 40 percent yield on Akhza.
- The forward view: just as the forward P/E looks at the bourse's future, the collapse in building permits is a negative supply forward for housing.
- Volume leads price: the return of real money to the bourse and the return of housing transactions signal before the price does.
- Asset allocation: the answer is usually not everything in one market; a framework such as asset allocation that weights three corners, stocks, housing, and a risk-free instrument, spreads the risk.
What to watch
This section is not advice; it is a watch list. Six thresholds that reveal a turn in both markets earlier than the price does: the outcome of the Doha talks; the path of the Akhza yield (a durable move below 30 percent could be the pivot point); the path of the dollar rate; Hormuz tension and the risk of a market closure; the summer power outages and the possibility of winter gas cuts to industry; and the rotation in volume, meaning real money entering the bourse and housing transactions returning toward five thousand deals. The final lesson of 1399 for today is simple: measure every asset with a dollar lens and against the risk-free rate, and remember that being cheap is not being safe. The figures in this report are dated to Tir 1405 and the relevant historical moments, and are not a basis for a definitive buy or sell recommendation.
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