The share of housing in the budget of Iranian households exceeds global standards! – Tejarat News

According to Tejarat News, Iran’s macroeconomics has gone through a chaotic situation in the past years, and people’s livelihoods have become more difficult every day. In the meantime, the rise in housing prices has been one of the main reasons for the shrinking of people’s tables.

According to statistics, since 2016, the share of housing in the budget of households has exceeded the 30% ceiling (global standard) and has moved away.

The increasing trend of the share of housing in household expenses

According to the data of the Iranian Statistics Center from the urban areas of the country, the share of housing in household expenses fluctuated between 28 and 29 percent between 1356 and 1384 and increased to 30 to 33 percent by 1396.

In 2017, with things like the shock of sanctions, inflammation in the field of foreign exchange, increase in inflation and the influx of capital demands to the housing sector, this sector also faced a sharp jump in prices, and as a result, the purchasing power of households lagged behind the price of housing.

Therefore, the share of housing in total household expenses (food and non-food) reached 35.5% in 2017 and 39.8% in 2018. This statistic reached its peak in 2019 and recorded a figure of 42.8%.

In addition to being about 19 percentage points higher than the housing poverty rate in that year, this amount also recorded the highest share of housing in the cost basket of Iranian urban households in the last four decades. In the year 1400, this amount went down and decreased to 36%.

Why the share of housing from the household portfolio Decreased in 1400?

In this regard, Peyman Molavi, an economist, told Tejarat News: “The average price of an apartment in Tehran in December 2017 was about 9.5 million tomans. It seems that the average housing price will reach 65 million tomans per meter at the end of June this year. It is not a secret to anyone that if someone does not have a house in Iran, how far behind the inflation based on the growth of property prices in the last five years alone.

He added: “We are living in an economy where property prices have gone through a rapid upward trend since 1998 and will experience an eight-fold growth by June of this year and in less than 6 years; But has the people’s income increased eightfold during this period? People who own houses feel this pressure in consumer items, but those who do not have houses, this pressure is imposed on them by housing costs.

“Sometimes 40 percent is considered an optimistic number in this context,” Molloy said. Some even spend 80% of their income on housing costs. This year, the situation will get worse, and until next year, people will be in a more difficult situation, because there is no clear prospect of housing inflation in Iran.”

Regarding the reason for the decrease in the share of housing in household expenses in 1400 compared to previous years, this economist stated: “Part of this decrease can be caused by the pressure on rents during the Corona era, but the general trend is increasing and it is possible until the end of this year. It is up to 45% or 50%.”

Housing costs for Tehrani households

According to what the Statistics Center of Iran has recently published, the share of housing in the household portfolio is different in the provinces of the country. Based on this, housing includes 47.9% of the expenses of Tehrani households; In other words, residents of this metropolis allocate nearly half of their income to housing costs.

Meanwhile, field observations show that for some of the residents of Tehran, this cost may reach up to 70%. After Tehran, Alborz province ranks second and 40% of the expenses of Alborz province households are spent on housing. After that, Hamedan ranks third with 37.9%.

In contrast to these three provinces, Kohgiluyeh and Boyer Ahmad with 18.6%, South Khorasan with 20.7% and Chaharmahal and Bakhtiari with 21.7% have the lowest share of housing in the net expenses of urban households.

Problems of tenants in Iran

With the sudden increase in the cost of housing in Iran and the decrease in people’s purchasing power, there are now few people in the society who can buy a house, and the number of these people is increasing every day. According to another report from the Iranian Statistics Center, there are now about 24,500,000 tenants in the country, of which 37% are urban households and 51% are households living in Tehran.

In other words, there are currently more than 24 million tenants in the country, and with this increase in housing prices and rents, their lives are in a difficult situation, and it is not clear what their fate will be after this.

In the past years, inflation in the rental and housing sector has exceeded the salary increase of a large segment of people, especially in the metropolis of Tehran, and now in some cases even the entire income of a head of household is not enough to meet the housing costs with the minimum required facilities.

Now the critical situation of housing has progressed to the point where it has pushed the households living in the metropolises to marginalization and poor housing. Conditions that cannot be considered for its harmful consequences with the continuation of this final crisis.

Read the latest housing news on Tejaratnews housing news page.

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