The 40-day war involving Iran’s regime, the United States, and Israel led to a phenomenon analysts describe as “wartime freeze.” Between February 28 and mid-April, property transactions nearly dropped to zero. Field reports indicate that the average price per square meter in Tehran now fluctuates between 1.25 billion and 1.33 billion rials (approximately 800 to 850 dollars). After a 15.6% surge in January–February, prices stagnated due to the shadow of war. Sellers, facing uncertainty about the future of peace, have increased asking prices by up to 10%. However, buyers have withdrawn from the market and shifted their capital into gold. In areas such as District 1 of Tehran, record prices of 5.8 billion rials (approximately 3,718 dollars) have been reported for select properties.
The Collapse of Livelihoods in Tehran; Housing Rent Has Become a Nightmare
Experts believe the housing market is currently in a state of waiting for lasting political stability. The fluctuation of the dollar around 1.6 million rials has completely disrupted developers’ calculations for new projects. Year-on-year inflation in March and April reached 50.6%, a serious warning sign. This inflationary pressure has turned housing from a consumer good into a safe haven for preserving value. Without a non-aggression agreement, a short-term recovery in property transactions appears unlikely.
Rent crisis and infrastructure damage during the ceasefire
The April 8 ceasefire has not yet restored stability to the rental sector. Missile attacks in February–March damaged around 40,000 buildings in the Tehran metropolitan area. The destruction of these units severely disrupted the balance of supply and demand in the capital’s housing market. Tehran’s City Council has approved a measure to provide affected residents with housing deposits of 20 billion rials (approximately 12,820 dollars). Additionally, rental assistance for affected families has been capped at 400 million rials (approximately 257 dollars). The shortage of habitable units has led to an unprecedented surge in rents in April. Reports indicate price increases of 30% to 50% in some central districts of the capital.
Tenants whose homes were damaged are now being housed in hotels or temporary camps. Increased demand for intact housing has sharply driven up deposit prices even in suburban areas. Landlords, citing a dollar rate of 1.66 million rials, are signing new contracts at high prices. According to official statistics, rental inflation in April rose by 7% compared to March. This situation has created a serious humanitarian and economic crisis for lower-income groups. The continuation of a fragile ceasefire has left tenants uncertain about renewing their annual contracts.
These prices come at a time when the base monthly wage of a worker barely reaches 100 dollars per month.
Construction downturn and the shift of capital to suburban areas
Housing construction costs after the recent war have reached astonishing and unprecedented levels. The price of construction materials has risen sharply due to disruptions in production and transportation. Developers aim to sell newly built units based on a dollar rate of 1.6 million rials. Meanwhile, the purchasing power of real buyers has been completely eroded by 50% inflation. In April 2026, the issuance of construction permits declined sharply due to military risks. Many investors have moved their assets from central Tehran to smaller cities. This geographic shift in capital is a direct response to insecurity caused by recent missile attacks. Housing markets in satellite cities are now experiencing higher demand compared to central and high-risk areas. The government has promised rapid reconstruction of damaged housing stock and buildings. However, banking imbalances pose a major obstacle to financing reconstruction loans in 2026. Experts warn that accumulated demand in spring could lead to a price explosion in summer. For now, the market remains in a state of waiting, with major transactions completely halted.
