Rental inflation has pushed tenants into shared housing

According to Tejarat News, Rent Inflation Rising above general inflation and housing inflation these days, it has forced tenants to make new decisions. Some time ago, the third wave of migration to large suburban cities such as Karaj was reported in the media, and now the option of participatory rental is on the horizon.

The purpose of a shared tenancy is for two families to live in the same rental apartment, even in some of the more expensive neighborhoods of the city, such as the non-residential areas in Zones One and Two.

To learn more about the third wave of migration from Tehran to the suburbs, open the link below.

the world of economy The fact that the upper and middle deciles, who have a history of renting in the best rental housing units in Tehran for several years, are now forced to rent a house to maintain the relative quality of their living conditions, is an event that shows the deepening deterioration of the rental market and astonishing inflation. That has dominated this market. In addition to these external effects and consequences, the high fever of rents can also be traced in official statistics.

The historical average inflation of rental points in Tehran during the last three decades has been about 22%, in recent years, the high fever of this market has caused the peak of rent inflation.

Now the ascent from the summit has stopped, but the downward movement has almost stopped; A situation that can be described as “stagnating rent-seeking inflation in the capital at the peak.” At present, rent inflation, which has always been a function of the general inflation rate as well as housing inflation, exceeds these two and is higher.

Leasing factors

In explaining the causes of the almost unprecedented surge in rents in Tehran in recent years, we can mention several cases, but there are three main factors that have had a greater impact on changes in rental rates than other factors.

The first and foremost factor is the jump in housing prices from 1997, which continued until late 1999, and because rent inflation is generally a function of housing inflation, this caused the average rent in the capital to change significantly compared to the situation Have a jump before.

The second factor in the almost unprecedented jump in rents is the general inflation situation. Rent Inflation It is always a function of housing inflation as well as general inflation, and considering that in recent years the general inflation rate has been increasing in most periods of time, this issue has also had an increasing effect on housing rent inflation.

The third factor influencing the inflamed rental market is the setting of a mandatory ceiling for the increase in rents, the effect of which has become apparent in the past year. “The orderly ceiling for the growth of rents in the Corona era practically suppressed the supply and reduced the number of rental units in the market, which caused the price of rents to increase even more.”

Immediate curbing of rent inflation from three directions

In the current difficult situation in which Tehran’s tenants are more vulnerable than ever, and at least for now, the trend of reversal of rent inflation from the peak has stopped, the housing policymaker can gradually stabilize the market by adopting three anti-convulsion policies. Relative guide.

The first key policy to curb rent inflation immediately and get out of the current state of emergency is to curb general inflation. Adopting measures such as regulating interest rates and controlling the growth of liquidity can reduce general inflation and, consequently, the rental market can calm down a bit.

The second key policy that has an immediate effect on reduction Rent Inflation It is certain that taking a path in the country’s macro-policy is to reduce inflation expectations.

In addition to the two policies mentioned above, the abolition of any orderly intervention in the rental market, especially given that its lack of control over rent inflation has been quite evident in the last two years, should be the third way to immediately curb rental inflation.

Contrary to popular belief, the game formed in the rental market is not even a win-lose situation in favor of the tenants, but a complete loss-lose game; On the one hand, the landlord preferred to leave the market because he could not account for the increase in rents at the rate he wanted, and on the other hand, the tenants, instead of benefiting from the mandatory rent ceiling, were faced with a shortage of files. They have faced an increase in mortgage and rental offers from other landlords in the market due to the shortage of files.