Housing rental in Tehran city rises 27% in a month

August 2, 2020 - 16:33

TEHRAN- Rent price in Tehran city increased 27 percent in the fourth Iranian calendar month Tir (June 21-July 21) from its previous month, according to a recent report released by the Central Bank of Iran (CBI).

The CBI report also shows that the rent price in the capital city has experienced a 31-percent rise in the fourth month of this year compared to the same month in the past year, IRNA reported.

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, Hesam Oqbaei, the deputy head of Tehran Real Estate Association, said on May 2.

“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,” the official added.

According to Oqbaei, 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.

In late June, Finance and Economic Affairs Minister Farhad Dejpasand announced the establishment of the country’s real estate stock exchange.

The minister had stated that the Economy Ministry was finalizing the issue with the Securities and Exchange Organization (SEO).

Last week, a member of Iran’s Securities and Exchange High Council announced that the country’s real estate stock exchange will be established by the next four-six months.

The establishment of such exchange is in line with the government’s policy of providing housing units for the underprivileged, and many efforts have been already made to prepare the required infrastructure in this due.

The head of the Tehran Stock Exchange (TSE) had previously announced that the exchange was due to be established in the middle of the previous Iranian calendar month (early July).

When established, it will be the country’s fifth major stock exchange. The four other ones are TSE, Iran’s over-the-counter (OTC) market, known as Iran Fara Bourse (IFB), Iran Energy Exchange (IRENEX), and Iran Mercantile Exchange (IME).

Deputy Head of Iran Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) says the establishment of the country’s real estate stock exchange is going to promote transparency in this market.

According to Hossein Selahvarzi, establishing this stock exchange is going to be an opportunity for making the transactions in the housing market more competitive and transparent, and will gain people's trust for participation in mass construction projects.

MA/MA

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