Saturday, August 11, 2007

Housing Crisis in Iran

Buying or renting a home in Iran has become unaffordable. The 57 economists in their open letter to Ahmadinejad last month had estimated the one-year increase in housing prices at 50%. Iran’s leading business paper, Donya-ye Eghtesad, has estimated that the rate of increase in rent in Tehran has exceeded 100% in the one-year period between July 2006-July 2007 (26 July 2007). Last year, the paper had reported a similar 100% increase in the cost of housing in Tehran between July 2005-July 2006 (31 July 2006).

Doubling of rent in Tehran, coupled with large increases in other cities, is creating an unbearable situation for the Iranian people. Donya-ye Eghtesad in its 26 July issue quoted a working couple faced with this dilemma: “My wife and I hardly earn 500,000 tumans a month, out of which we have to pay 400,000 tumans as rent. How can we live on 100,000 tumans a month?"

The prices for construction material are also skyrocketing. Aftab Yazd reports that the price of bricks rose by 150% within the past 6 months (15 July 2007).

The housing crisis is serious enough to add to political instability in the country. Ahmadinejad’s administration will be regarded by people as directly responsible for not only dropping its campaign promise of bringing oil revenues to their dinner tables, but leading the country into a period of skyrocketing housing prices.

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