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Housing Prices, Rents Climb Fast As Iran's National Currency Loses Value

A general view of traffic, following the outbreak of the coronavirus disease (COVID-19), after shopping malls and bazaars reopened in Tehran, April 20, 2020

Real estate prices in Iran’s capital Tehran have risen by 23 percent in the past one month, the Ministry of Housing, Roads and Urban Development has announced.

The unprecedented increase in house prices have been in parallel with the devaluation of the national currency and its fall against the U.S. dollar and other major currencies.

Compared with the same month last year (May21-June20) real estate prices rose 42 percent according to the ministry.

The social impact of more expensive housing is both on new buyers and renters. It is not clear what percentage of the population rents compared with home owners but 43.6 percent of Tehran residents were renters according to figures published in 2015.

Reports about skyrocketing rents in Tehran and other major cities say that some families are forced to cohabit a single unit to split the rent cost.

Iran’s economy is in the grips of a major recession in the past two years triggered by U.S. sanctions that have cut the national income, devalued the currency and created a 40 percent inflation rate.

Iran’s Statistical Center said Tuesday, June 23 that people’s purchasing power has declined by 34 percent in the past decade. Given a seven-fold fall in the value of the national currency, this might be an underestimation.

Shahrvand newspaper in Tehran on Wednesday reported that young couples sell gold and their cars to pay for rising rents. An investigation by the newspaper showed that rents climbed 40-100 percent since last year in four populous areas of the capital.