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The Guardian World1 min read
High prices in Iran’s stunted housing market leave tenants with few options
TL;DR
Iran's housing market is facing high prices, with rent for a 20-year-old apartment in Tehran increasing from $73 to $130. Most tenants struggle to meet these costs, as the monthly minimum wage is around $90.
Key points
- Rent for a 20-year-old apartment in Tehran increased from $73 to $130
- Monthly minimum wage in Iran is about $90
- Most tenants are believed to be living under the poverty line
- Poverty line income for an average family is about $400
- Tenants are renewing contracts to avoid worse price hikes
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Tehran
Tehran, Iran – When Mohammad, a 29-year-old resident of western Tehran, renewed his tenancy contract earlier this week, the price increase did not come as a surprise.
His landlord had raised the rent for the 20-year-old apartment to 230 million rials ($130), up from 130 million rials ($73).
Monthly minimum wage in Iran is currently about $90, which can go to $120 after accounting for government-issued subsidies, electronic coupons and marriage or housing-related allowances.
Most tenants are believed to be surviving under the poverty line, which is about 700 million rials ($400) in monthly income per average family.
“I think the landlord was happy to extend for another year because of the market conditions, and I wanted to stay because the price increase could be worse,” Mohammad, who works as a driver for a ride-hailing app, told Al Jazeera.
Moreover, he said, his neighbourhood was not directly targeted in the air attacks that the United States and Israel launched in late February, before strikes were suspended more than a month ago under a tenuous ceasefire.
He added that more affordable alternatives to the 60-square-metre (645-square-foot) apartment would be smaller and older, or located in southern Tehran, which would mean having to commute an extra hour daily to go to work.
Incomes and expenses hardly match for many Iranians who do not own homes, forcing them to pay large amounts to keep a modest roof over their heads or make compromises.
According to the Statistical Center of Iran, rents rose 31 percent year-on-year in Farvardian, the first month in the Persian calendar, which ended on April 20.
No official data has been released for Tehran, but reports in local media and realtor associations indicate that prices in the capital are now 30 to 40 percent higher on average compared to last year. Areas less affected by the war are growing more expensive faster.
Those figures are technically lower than year-on-year inflation, which was at 73 percent in the same month, and is believed to have surged even higher in the weeks since, as the impact of the war further strains the ailing and sanctions-hit Iranian economy.
But even before the war, rents were already coming off a very high base after years of unchecked price hikes. And with wages not even remotely keeping pace, the annual contract resets have become a source of anxiety for many.
A real estate agent in Tehran told Al Jazeera that fewer housing contracts are being signed due to uncertainty over the potential resumption of fighting amid the deteriorating economic conditions.
“The prices are shifting lifestyles in the tenancy market; I’ve had people looking for housemates to cut expenses in half, people going back to smaller cities or city suburbs, and people moving back into their parents’ homes,” the 45-year-old said.
Q&A
What is the current rent increase for apartments in Tehran?
The rent for a 20-year-old apartment in Tehran increased from 130 million rials ($73) to 230 million rials ($130).
How does Iran's minimum wage compare to housing costs?
The monthly minimum wage in Iran is about $90, which is significantly lower than the average rent, leaving many tenants in a difficult financial situation.
What is the poverty line income for families in Iran?
The poverty line for an average family in Iran is approximately 700 million rials ($400) in monthly income.
Why are tenants renewing contracts despite high rent increases?
Tenants like Mohammad are renewing contracts to avoid potentially worse price increases in the volatile housing market.
