Housing rentals expected to stay under inflation ceiling

May 2, 2020 - 14:25

TEHRAN – Deputy head of Tehran Real Estate Association says rent prices in the country’s housing market are not expected to increase drastically and will stay under the inflation rate, IRNA reported on Saturday.

“Last year, when house prices experienced a 100-percent growth, rent prices rose by as much as 30 percent. Of course, this year we anticipate that rent growth will not reach inflation and will stay below the inflation rate,” Hesam Oqbaei said.

The housing market is experiencing inflation and rise in prices, both in terms of rentals and sales, but the rise in prices is not going to be like the last year's sudden surge, he said.

According to the official, 37 percent of the country's urban population are tenants, who are from the low and middle classes of the society and their salary increase has been up to 22 percent, so if the rent prices were supposed to grow along with the house prices people won’t be able to afford it.

Noting that the government planned to provide financial facilities for the low-class tenants last year, Oqbaei said: "Now is the time to grant financial facilities, because the transfer season has begun and it is time for the government's last year’s proposal to become operational."

Oqbaei underlined the lack of balance in supply and demand as the main reason for the upward trend in housing prices and said since there are not enough bank facilities available to homebuyers, more people will stay as tenants and the demand for house rents increases, so consequently rent prices will also rise in areas where there is an imbalance between supply and demand.

EF/MA

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