One year of a worker's salary is equivalent to one square meter of a residential unit in Tehran.

The average housing price in Tehran has increased by 92 percent since September last year. In some areas of Tehran, the price increase has exceeded 100 percent.

According to statistics from the Central Bank of Iran, in September the average price per square meter of housing in Tehran was 24 million and 200 thousand tomans. This price was 12 million and 700 thousand tomans in September 2019. This means that housing prices have increased by about 92 percent from September 2019 to 2020.

In a report on housing prices, Tejarat News calculated that, based on the approved minimum wage for workers, which is 2.6 million tomans, a worker could buy a 1.20 square meter house in Tehran after a year if he did not spend anything for a whole year and saved all his salary.

Thus, by saving his entire salary, this worker could buy a 60-meter house in Tehran after 46 years, if the price of the house has remained the same until then.

This is while the mortgage ceiling announced by the Central Bank is 400 million tomans, with which one can only buy 16 square meters of a residential unit in Tehran.

The "Economics Nine" website has also compared housing prices in different areas of Tehran in September 2019 and September 2020 in a table.

According to this table, the most expensive areas of Tehran in terms of housing are areas one, three, and two, respectively. However, the highest inflation in the past year occurred in area 19; housing prices in this area of ​​Tehran increased by 129 percent from September 2019 to September 2020. After that, areas three and one, respectively, faced housing price increases of 104 and 103 percent each.

Reasons: From the fall in the value of the rial to the real estate transaction commission

Previously, the Ministry of Roads and Urban Development had prepared statistics on housing prices, according to which housing prices in Tehran had increased by 500 percent in the past three years.

Experts believe that this rapid growth, which began in mid-2017, is due to various factors, such as the huge gap between the production rate and the actual demand for housing, the significant fall in the value of the rial, and the sharp increase in the price of construction materials.

According to many experts, another reason for the rise in housing prices, especially in Tehran, has been the lack of supply of newly built apartments.

The Donyayeh Eqtesad newspaper wrote in a detailed investigative report on this matter: " Paying attention to the construction record in Tehran during the period 2014-2019 shows that during this period, the annual construction turnover has decreased by an average of 15 percent."

Meanwhile, the head of the Mass Builders Association has identified one of the causes of the housing price increase as the government’s rising costs for housing construction. Mojtaba Bigdali told the “Bazaar” website that the cost of social security insurance was previously 250 tomans per square meter of housing, but now it is 30,000 tomans per square meter.

According to him, engineering organizations and city councils have also "competed" and drastically increased costs.

The head of the Housing Association has called the statement that "guilds are causing housing prices to rise" "a misdirection by the government."

Recently, the government approved a reduction in the real estate commission rate by about 50 percent. This measure was taken in order to regulate the housing market.

The head of the Isfahan Real Estate Consultants Union told ISNA: "There are dozens of reasons for the high cost of housing, and real estate consultants' commissions are a small part of them. Despite the private sector's insistence, the government has not consulted on setting the new real estate consultants' tariff, and we predict that this hasty decision will make the market more chaotic than before."

Whether it's the shortage of newly built apartments, the devaluation of the rial, the high commission on real estate transactions, or any other reason, the result is the same: having your own roof has become an unattainable dream for many residents of Tehran and other major Iranian cities.

Source: DW