Housing and nothing else
According to Iran Gate, the performance of the government of Ebrahim Raisi has led Iranian citizens to the lowest level of purchasing power in the housing market. Official reports on this matter are not published, and the government prevents the market situation from becoming public. However, investigations show that Tehran residents have never seen such a high and burdensome share of housing in their household expenses.
Observations and reports published about the housing market indicate a significant increase in the share of housing in Iranian households’ expenses. On the other hand, there have been reports in official media indicating the emergence of phenomena such as sleeping containers and renting containers for storing personal belongings. However, this increase in the share of housing has forced Iranian households to cut expenses on healthcare, food, and clothing.
In search of a roof
The unprecedented and unpredictable increase in housing prices across the country, especially in major cities, has caused low and middle-income households to struggle with shrinking budgets. Although the government has not released housing market statistics in the past seven months, field observations by domestic media indicate otherwise.
The purchasing power of citizens in the housing market has reached its historical low since the formation of the modern nation-state in Iran. Iranians have never faced such a severe crisis of homelessness and inadequate housing in recent centuries. This phenomenon is a result of the strange and unconventional policies of the government under Ibrahim Raisi’s administration in managing the country’s economy.
Many low-income individuals are forced to engage in negative migration from major cities to smaller towns and even, in some cases, to rural areas. We can also witness the renting of containers in Tehran, which is done to store belongings. These belongings are either stored on the outskirts of Tehran due to negative migration or because the reduced size of homes and living spaces no longer allows their owners to use them.
Housing accounts for 50% of the expenditure basket.
Research shows that every citizen should allocate a minimum of 28% to 30% of their expenses for housing in order to live a normal life and afford basic necessities in various sectors. However, in Iran today, not only does this ratio deviate significantly from these standards, but it is also on the verge of reaching the 40% threshold. Published statistics indicate that the share of housing expenses in urban households in Iran has reached an unprecedented historical level of 385%, reflecting the unstable economic conditions and the shrinking of ordinary people’s livelihoods.
Monitoring these statistics reveals that in the years following the Islamic Revolution in 1979, we suddenly witnessed a continuous and sudden growth in the share of housing expenses in urban and rural households. However, this figure has reached a dangerous and unbelievable level of 52% in the capital city, Tehran. This means that, on average, a Tehran household spends more than half of its income to provide a high-cost roof over their heads.
Housing instead of food, healthcare, and culture
The increase in housing costs, which was previously mentioned, means a decrease in the share of other expenses. For example, on average, Iranian households have reduced healthcare expenses by 15% compared to 1390 (2011). The allocation for cultural expenses has also faced a decrease of more than 8% in the past 12 years. Interestingly, the share of healthcare expenses has decreased by more than 0.6% since the beginning of President Raeisi’s government, and culture has also faced a decrease of approximately 45% in expenses.
In other words, it can be said that Ebrahim Raisi and his government have managed the economy in such a way that they have reduced the share of healthcare and culture to the extent of the entire 90s decade. This means that people have been under so much pressure in these past two years that they have had to cut back on healthcare and cultural expenses, just to provide a basic standard of living.
Unfortunately, it is evident in Tehran that not only healthcare and culture have had a smaller share, but the share of food and clothing expenses has also faced a 0.3% decrease in the past two years. These statistics indicate that the Ebrahim Raisi government has directly affected the ordinary people’s table and poured all the quality measures into the pockets of market intermediaries.
This is happening while Ebrahim Raisi had promised to build one million housing units annually during his election campaign, a promise that not only has not been fulfilled, but we are also facing a decrease in the construction rate in the country. Many believe that the failure to achieve this unsupported slogan by Raisi has put psychological pressure on the housing market, causing housing prices to rise even more intensively.
What is the real housing inflation? Part 2
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