The high prices in the Iranian housing market leave renters with few options | US-Israel War on Iran News

Tehran, Iran – When Mohammad, a 29-year-old resident of western Tehran, renewed his rental agreement earlier this week, the price increase did not come as a surprise.

The landlord raised the building’s 20-year rent to 230 million rials ($130), from 130 million rials ($73), while keeping the cost down to 5 billion ($2,800 at today’s rates).

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The minimum monthly wage in Iran is currently around $90, which can go up to $120 after accounting for government subsidies, electronic coupons and wedding or housing related payments.

Many renters believe they are living in poverty, which is about 700 million rials ($400) a month for the average family.

“I think the landlord was happy to extend another year because of the market, and I wanted to stay because the price increase would be worse,” Mohammad, who works as a truck driver, told Al Jazeera.

Also, he said, his region did not directly focus on the airstrikes launched by the United States and Israel at the end of February, before the demonstrations were stopped more than a month ago because of the ceasefire.

He also said that the cheapest options in a 60-square-meter (645-square-foot) room will be small or large, or located in the south of Tehran, which means you have to walk for an hour every day to work.

Their incomes and expenses are out of reach for many Iranians who are homeless, forcing them to pay more to keep a small roof over their heads or compromise.

According to the Statistical Center of Iran, rents rose 31% year-on-year in Farvardian, the first month of the Persian calendar, which ended on April 20.

No official information has been released in Tehran, but reports from local media and business associations indicate that capital prices are now 30 to 40 percent higher than last year. Areas less affected by war are growing faster.

These figures are technically lower than the annual rate of inflation, which stood at 73 percent in the same month, and are believed to be it’s too high in the weeks since, the war is also straining Iran’s ailing and chastened economy.

But even before the war, borrowing costs had already risen years of unspecified inflation. And with wages not moving steadily, annual contract renewals have become a concern for many.

A real estate agent in Tehran told Al Jazeera that fewer contracts are being signed because of fears of a resumption of fighting amid the economic crisis.

“Prices are changing the life of the market; I have had people looking for friends to reduce costs in the middle, people returning to small cities or villages, and people returning to their parents’ homes,” said the 45-year-old.

He said the cost of buying a home has also increased, in some areas more than the rate of inflation. The rapid increase in the prices of building materials has also caused house builders to watch, some of whom have suspended work to see if the war ends, he said.

‘They have to endure hardships’

Faced with a budget crisis amid US sanctions and the United Nations, the size of the support provided by the Iranian authorities has been very limited.

Earlier this month, the Tehran Association of Realtors cited the Supreme National Security Council as ordering that employment contracts that expire during wartime be extended by up to two months.

Officials have also set a 25 percent discount the annual rent increasesbut local media have reported that this number acts as a floor, rather than a ceiling, for the business.

The government also offers loans to help people pay their rent.

But this number reaches 3.65 billion ($ 2,050) in Tehran, and has decreased to 2.8 billion ($ 1,582) in the provincial capitals; 1.85 billion rials ($1,050) for other cities; and 750 million rials ($420) for villages.

These figures may help some lenders, but often prove to be insufficient, especially in Tehran, where deposits are several times the amount of loans issued per family unit in many districts.

Expected emergency aid was also provided to those whose homes were destroyed during the war or destruction. These people were given emergency accommodation in hotels by the Tehran Municipality or local authorities.

Affected families were also eligible for additional rental deposit assistance. The bombing may have also created some legal issues for the residents of the damaged buildings, as the buildings were not meant to be evacuated.

According to the state-linked news agency ILNA, the rent obligation usually remains unless the unit has a problem or damage that affects one’s habitability. Builders are advised to refer to a dispute resolution council established to adjudicate civil cases if necessary.

Looking ahead, prices in the housing sector are expected to rise, similar to other parts of the economy that have been happening stuck in limbo for a long time without war or peace.

On Monday, US President Donald Trump he said had called off an attack on Iran that was supposed to take place on Tuesday at the request of the Gulf allies. But he warned that his troops could still be attacked if there is no agreement.

“We are fighting, but we have problems. We will have a lot of ups and downs. The fighters have to endure the difficulties,” Iranian President Masoud Pezeshkian said in a speech on Monday.

A woman who only gave her last name, Rezaei, told Al Jazeera in central Tehran that the prices are now not the same as last month, and have risen again in recent days.

“I bought a lot of things last week, and now the prices have doubled,” he said.

My purchasing power has dropped by about 70 percent; the purchasing power of the people has decreased significantly.