The increase in housing prices in Iran has led to an increase in housing poverty, and reports indicate that people’s tastes and inclination have forcibly changed towards houses that are 40 square meters or less.
On November 7, the state-run Donyaye Eghtesad newspaper reported that statistics indicate a record number of residence registrations in houses up to 40 square meters in the capital city during the current year.
According to the report, the share of small houses with an area of up to 40 square meters in Tehran’s real estate transactions has increased from 3.3 percent in 2018 to over 5.2 percent in 2023.
This trend can be attributed to the inflation in the housing market, as reported by the Statistical Center of Iran. The average price per square meter of an apartment has increased from 62 million rials (approximately $1,088) in the spring of 2018 to over 808 million rials (approximately $1,569) in September 2023. While the difference in dollar value is around 50%, the rial difference is more than tenfold as the national currency has depreciated severely due to the regime’s policies in the same period.
Housing inflation has caused statistical centers to refrain from publishing new data for over eight months. However, this approach failed to hide the economic realities of the country. In this regard, the Majlis (parliament) Research Center referred to the increase in eviction rates from the housing market in a report published on August 9, stating that households in the first to third deciles are absolutely unable to procure housing, and households in the third to fifth deciles and even a portion of the sixth decile are relatively unable to meet their housing needs.
The 18-fold increase in housing prices in Tehran over a period of seven years has resulted in the share of apartments with a building age of over 20 years in total residential transactions triple compared to 2016 when the market conditions were normal.
The increasing phenomenon of informal settlements and living in slums is another manifestation of housing poverty. Another destructive effect of the recent housing inflation wave is that housing costs account for 70 percent of the expenditure basket of Tehran households, which means that two-thirds of the income of tenant households is spent solely on housing rent.
The United Nations Human Settlements Programme (UN-HABITAT) has announced a minimum per capita residential space of 17 square meters. Considering that the average household size in Tehran is currently about three people, the minimum suitable residential area for households in Tehran is currently equivalent to 51 square meters. Therefore, housing units up to 40 square meters do not meet the minimum residential standard for Tehran residents.
According to official statistics, currently, 18 percent of housing transactions are carried out in the group of units up to 50 square meters, indicating that out of every five households purchasing a house, one buys a house that is smaller than the expected minimum standard.
The Majlis (parliament) Research Center also reported on June 8 about the critical housing situation in Tehran and the “950 percent increase” in its prices over the past five years.
The Tehran City Council also announced in a report on September 4 the housing situation in the capital, stating that 70 percent of Tehran households suffer from “housing poverty” and “poor housing conditions.”
The Tehran City Council report also emphasized that the share of housing costs in the household expenditure basket has increased from 33 percent in the 2000s to over 50 percent, indicating that more than 70 percent of Tehran households are affected by “housing poverty.”
The regime’s president, Ebrahim Raisi, during his presidential election campaign and after the formation of his cabinet, repeatedly promised to “build one million houses annually.” However, after more than two years, the realization of this promise is still questionable.
