What is the cost of living in Tehran?

How much does it cost to live in Tehran?

According to Iran Gate, while inflation in Iran has reached a 70-year record high, the cost of living in different cities across the country has significantly increased. However, reports indicate an unprecedented rise in the cost of living in the capital city. Some believe that in the coming years and months, we should expect reverse migration from Tehran to smaller towns.

Tehran is seen by many Iranians as a sea of opportunities, requiring only the will to seize them. However, residents of Tehran believe that the cost of living in the capital is so high that despite the hot job market in Tehran, living in this city is not economically or socially viable. However, many Iranians believe that those who can have a continuous presence in this job market can cope with these expenses.

But the question is, how much does it really cost to live in Tehran? This report calculates the relative cost of living in the capital, which will be discussed further below.

The cost of housing in Tehran

Recently, statistics on housing inflation in Tehran were released, indicating a year-on-year inflation rate of 115% in Farvardin 1402 (March-April 2023). However, the government of Ebrahim Raisi and the Central Bank have not released any housing market statistics for about 6 months. Nevertheless, field observations show that the average price per square meter in the capital is around 85 million Tomans, which is equivalent to 1,600 dollars at the free market exchange rate of 52,000 Tomans per dollar in Khordad 1402 (May-June 2023).

This is while, assuming the minimum wage is 10 million Tomans in the best case scenario, it would take more than 50 years to be able to purchase a 70 square meter apartment without spending any rials from the 10 million Tomans wage. However, if one-third of the income is saved, assuming zero inflation, it would take more than 150 years to accumulate enough savings to afford a minimum down payment for an apartment.

Considering the statistics and figures published regarding the housing prices, it is almost obvious that rural migrants at the beginning of their journey do not have the ability to buy an apartment unit. Therefore, the rental housing market in Tehran is very hot and crowded with applicants. According to the statistics published by domestic media, the average down payment for a residential property is approximately equivalent to 12 million Tomans with a dollar exchange rate of 52,000 Tomans. The monthly rent for each square meter of residential property in Tehran is also approximately 65 dollars, which is about 350,000 Tomans. Therefore, the monthly rent for an apartment in Tehran on average is about 450 dollars, which is more than 23 million Tomans per month.

The average cost of buying a 70 square meter property is also calculated to be approximately 850 million Tomans with a dollar exchange rate of 52,000 Tomans.

The cost of transportation in Tehran

The public transportation system in Tehran is facing widespread problems and deficiencies. However, many Tehran residents still use the city’s subway network. Currently, the minimum metro ticket fare is 2,300 tomans and the maximum is 3,500 tomans. The cost of the shortest taxi ride is also around 10,000 tomans, and the bus ticket is equivalent to 1,500 tomans. Additionally, the online taxi application market is thriving in Tehran, with an estimated monthly cost of using these services ranging from 100 to 150 dollars, which is equivalent to approximately 5 to 75 million tomans at the exchange rate of 52,000 tomans per dollar.

The cost of transportation in Tehran, of course, needs to be evaluated based on the price of cars and comparing them to other major cities in the region. For example, a used Toyota or Hyundai car with approximately 100,000 kilometers in Tehran costs about 4 to 6 times more than a brand new model of the same brand in other cities of the same category as Tehran, and even worldwide. Therefore, buying a used foreign car for new residents of Tehran is almost impossible, and even for buying a new Iranian car, they would need at least 400 million Tomans in their account, which is practically impossible considering the living conditions of immigrants in the first step.

All these costs, considering the time that citizens have to spend in traffic, are almost equal because factors such as air pollution, social unrest, and prevailing abnormalities in society, in addition to wasting time, also need to be taken into account.

The cost of food and clothing in Tehran

There is no specific number or figure for clothing expenses in any province of the country, but generally it can be said that the average price of clothing and food in Tehran is higher than the national average. Therefore, it is not possible to reach a specific number or figure, but immigrants should keep in mind that the cost of food and clothing in Tehran is significantly higher than in other cities.

The cost of eating a meal in restaurants in Tehran is also not comparable to any of the cities in the country. It can be said that this factor is the only one that specific statistics and figures can be obtained for. The average price of a meal in restaurants in Tehran is estimated to be around $6, which is equivalent to 300,000 Iranian Rials. In contrast, the average price of a traditional meal in other cities is around $35 to $45, which is equivalent to 175,000 to 225,000 Iranian Rials, showing a difference of about 75 to 85 percent.

The cost of having a cup of coffee and a piece of cake in cafes in Tehran is also on average around $3 to $4. In contrast, the prices mentioned in cafes in other cities of the country are equivalent to $1.5 to $2, showing a difference of about 100 percent.

How is life in Tehran?

Based on the factors that have been examined, it can be said that the cost of living for a family of four in Tehran is approximately $1,000 more than 50 million tomans per month on average. However, this cost has been calculated assuming the use of rented housing, public transportation, and completely ordinary food and clothing. Naturally, it is possible for families to live in Tehran with significantly lower amounts, or many others may experience a more expensive lifestyle.

Therefore, it is expected that the heads of four-member families should have a total monthly income of more than 70 million tomans in order to have a decent life and be able to save or invest about 35% as well. But can individuals earn such an income in Tehran? Again, we must refer back to the introduction of this report, as the job market in Tehran is very competitive and vibrant. However, it should be noted that individuals have different talents and abilities that can lead to earning incomes in the tens of millions of tomans.