A new report from Iran’s regime Statistical Center indicates that urban rental prices have increased by approximately 42% over the 12 months ending in November, compared to the same period the previous year. Inflation in the rental sector is 8.6 percentage points higher than general inflation, despite the government setting a 25% cap on rent increases in July.
The latest Consumer Price Index report from the Statistical Center shows that housing rents increased by about 42% over the 12 months ending in November. The same report indicates that in November, rental prices rose by approximately 3% compared to October and by about 40% compared to November 2023.
The official report documenting a 42% increase in rents comes despite statements made on June 26 by Mehrdad Bazrpash, the Housing and Urban Development Minister of the previous government. During the 18th session of the Supreme Housing Council—effectively the last such session under Ebrahim Raisi’s administration—Bazrpash announced that an average rent increase cap of 25% had been approved.
Iran’s regime efforts to control prices through legislation—commonly criticized by opponents as “mandated price-setting”—generally fail.
Since July, following the implementation of the rent increase cap, annual inflation in the rental sector has been recorded by the Statistical Center as 41.4% in August, 41.7% in September, 41.8% in October, and 41.7% in November.
In all four months, rental inflation exceeded general inflation. From September to November, rental inflation was reported to be 6.6, 7.5, 8.2, and 8.6 percentage points higher than general inflation, respectively.
Rental costs have surged significantly since 2020. The primary reasons for this increase are, first, the steep housing inflation in previous years and its continued rise, and second, high general inflation since 2019.
The state-run Donya-e-Eqtesad newspaper criticized mandated price-setting in the housing sector, stating that if the government, instead of addressing general inflation and controlling the drivers of housing inflation, sets rent rates for the market, such measures will not only fail to gain market acceptance but will also provoke negative reactions due to attempts to impose prices below economic realities.
