The state-run Rokna news website published remarks by Iraj Rahbar, head of the Tehran Association of Mass Home Builders, regarding Iran’s housing crisis. He reported an average 100% increase in construction material prices and said that some products linked to the petrochemical industry have more than doubled in price. In just 40 days, the price of rebar increased by about 230 million rials (approximately $123).
Under such conditions, no investor can plan for the future. The construction sector, which has long been a key driver of employment and investment in Iran’s economy, has itself become one of the main victims of instability.
The increase in workers’ wages must also be viewed in this context. The daily wage of an unskilled laborer has risen from about 12 million rials to about 25 million rials (approximately $14).
Projects That Remain Only on Paper
According to the report published by Rokna, the actual construction cost has now reached about 550 million to 700 million rials per square meter (approximately $293 to $373), while contracts under the National Housing Movement project were signed based on 2023 prices of 85 million rials per square meter (approximately $46). Even after price adjustments, the gap between actual construction costs and the contracted amounts remains substantial.
This gap shows that many projects were based from the outset on estimates that no longer correspond to today’s economic realities.
A direct consequence of the housing crisis will be further increases in home purchase prices and rents, placing even greater pressure on millions of families.
The Housing Crisis: From the Economy to Society
The housing crisis has now become a social issue. Declining housing construction, the expansion of informal settlements, rising numbers of renters, delayed family formation, and widening class divisions are all interconnected consequences of this trend. For a large segment of society, housing has shifted from a basic necessity to an unattainable commodity. Under these conditions, the dream of homeownership has given way to the struggle to pay next month’s rent.
From both economic and social perspectives, this situation cannot be viewed merely as the result of temporary market fluctuations. Persistent inflation, the devaluation of the national currency, an unstable business environment, and declining investor confidence have combined to create the severe downturn now affecting the construction industry.
If this trend continues, its consequences will extend far beyond the construction industry. Declining employment, reduced investment, deepening urban poverty, and growing inequality are among the outcomes that could weigh on Iran’s economy and society for years to come. In this context, the housing crisis is not merely a sectoral problem but a reflection of deeper economic and governance challenges facing Iran today.
