Tenants worried about summer! / Ineffective government actions in the rental market
According to Tejarat News, the 50% increase in housing rents, which has created problems for the tenants, has been one of the grievances raised by MPs during a meeting with the Minister of Roads and Urban Development. Deputies believe that in the supervisory vacuum of those in charge, rents are increasing day by day.
The transfer rate has not yet started and the rental rate changes compared to late last year have not been very noticeable. As reported by the Central Bank in March last year in Tehran, rents increased by 0.4 percent compared to February and its annual growth rate was 46 percent. These figures were announced as 1.2% and 50% for the whole country, respectively.
Probably at the end of June, with the arrival of the tenant relocation season, new rates will be discovered. Although housing prices have stabilized somewhat and reached an annual growth rate of 16 percent, experts predict that rents will make up for the shortfall in housing prices.
In this situation, many young couples are facing difficulties in paying the amounts requested by the owners. Last year, tenants, who are generally limited in power, went through difficult times, and given that their incomes are not in line with general inflation and rent growth rates, there is little hope that their situation will improve this year.
The situation of tenants changes with any change in macroeconomic conditions; Because various factors such as bank interest rates, general inflation, housing prices and wage growth rates affect this market. Due to low interest rates, banks prefer to receive more rent than cash in advance compared to rent. On the other hand, the amount of mortgage that tenants give to landlords goes up every year due to inflation above 40% of the Iranian economy. So the tenants are in a losing game.
In the last two years, the government has taken measures such as paying housing deposit facilities and setting a permissible ceiling of 25 percent to increase rents, which has not had much effect on the rental market.
The current situation has prompted lawmakers to ask the Minister of Roads and Urban Development about the state of the housing market. In this regard, Ismail Hosseinzehi, Deputy Chairman of the Civil Commission of the Majles, referring to the unfavorable situation of housing rents this year, said: “Unfortunately, in recent years, we have witnessed a tremendous growth in housing rents.” This year, too, these increases have continued to such an extent that they have raised the voice of the people. This issue was one of the serious complaints of the members of the Civil Commission from the Minister of Roads and Urban Development that they raised in the meeting with him.
He said that the rent of housing is increasing day by day in the supervisory vacuum of those in charge, adding that the government should take this issue seriously and not allow the unbridled growth of rent.
The representative of the people in the Islamic Consultative Assembly emphasized: Some government officials state that with the annual construction of one million housing units in the framework of the National Housing Movement, the market will reach relative equilibrium and prices will be braked, but this is beneficial for the long term. And it’s effective now that a large portion of young people are looking to rent a home after marriage, which is a big problem at such prices.
Hosseinzehi said: “The Ministry of Roads and Urban Development and the Ministry of Silence should address the issue of high housing rents. If no plan is taken to control the market from the beginning of the year, we will see a significant increase in rents by the end of the year.”
After a 600 percent increase in house prices in Tehran from 2017 to 1400 and a slowdown in housing prices, the rent growth trend, which was a remnant of the increase in sales in the sales sector, intensified last year and the rent growth rate of about 12 The percentage reached over 50% in the early 1400s and late in the same year.
The construction situation is not very suitable as a balancing factor in the housing market. Mahmoud Mahmoudzadeh – Deputy Minister of Roads and Urban Development announced that the number of units under construction in the whole country has reached half a million last year and said that in 1400 we reached the production of 520,000 housing units, but this figure compared to the peak production of housing per year 1392, when 809 thousand housing units were built, shows a decrease of 38%.
The mentioned statistics indicate the unfavorable situation of the housing market in the two sectors of purchase and sale and rent, which requires the planning and implementation of the necessary arrangements by the three forces.
Source: ایسنا