Main achievement of 84% housing inflation
According to Iran Gate’s report, the main achievement of 84% housing inflation has been reported by the Statistical Center. In other words, the average price per square meter of housing in Tehran has exceeded 80 million tomans. This means that housing inflation is more severe than the country’s overall inflation by over 40%, and Tehran residents are facing the phenomenon of housing crisis more than ever before.
After a 9-month hiatus, the Statistical Center of Iran finally published the housing market report. This report reveals some harsh realities, indicating a very dire situation and a decrease in purchasing power of citizens in the housing market. Housing inflation point-to-point in September 2023 has registered an increase of over 84% compared to the same period last year. These figures show why the government’s statistical center refrained from publishing the housing market report during the past 9 months. The government, which promised to build 4 million housing units, has not only failed to fulfill its promise but has also only achieved about half of the statistics related to the year 1999 in terms of housing production.
9-month statistical imprisonment
Contrary to the law, President Ebrahim Raisi has refrained from publishing the housing market report during the past 9 months and throughout the year 1402. This is while the publication of reports such as the monthly inflation report by the Central Bank and even the Statistical Center has been accompanied by a lot of disorder and ambiguity in the past year. However, the publication of the Statistical Center’s report last week finally revealed the reason behind the 9-month statistical imprisonment caused by President Raisi.
What does the Statistical Center’s report say?
According to the report published by the Statistical Center of Iran regarding the housing market situation, the average price per square meter of housing in Tehran has exceeded 80 million tomans. This is while the latest report published by the Statistical Center indicated a price of 45 million tomans per square meter for housing in the capital.
Therefore, a rough calculation shows that the year-on-year inflation in housing reached over 84% in Shahrivar 1402, which is unprecedented in modern Iranian history. For example, comparing the price of housing in the summer of 1402 with a similar period in 1394 shows an increase of over 20 times, meaning that the price per square meter of housing in Tehran has increased more than 20 times in the past 8 years.
While the housing prices in 1402 have reached over 80 million tomans, which was less than 3 million and 900 thousand tomans in the summer of 1394. This means that the purchasing power of Tehran citizens in the housing market has decreased more than 20 times in just 8 years. However, the minimum wage has increased about 6 times during the same period. Comparing these statistics and figures indicates the state of the housing market.
Severe recession in the housing market
According to the report of the Center for Real Estate Transactions Statistics, in the summer of 1402, approximately half of the transactions were in the same period as in 1401. This happened due to a significant decrease in the housing production rate and uncertainty about the future of housing among citizens and market players. This is despite the promises made by Raeisi and the thirteenth government to control housing prices in the country through increasing the production rate and making the youth homeowners.
However, transaction statistics show that the level of transactions in spring 2023 has decreased to less than one-third of the level of transactions in the same period of 2022. This means that during the season when real estate transactions were at their peak, Tehran citizens neither had the ability to buy housing nor had confidence in the market situation to engage in transactions. Currently, despite the fluctuations in the exchange rate in the foreign exchange market, we are still witnessing a severe recession in the housing market, which is caused by uncertainty about the future of the country’s economy and the lack of purchasing power among property seekers in the market.
What happened to the promised 4 million housing units?
Time and time again, both domestically and internationally, there has been talk of Ibrahim Raisi’s promise to build 4 million housing units during his 4-year presidency. This promise was made under conditions where economists were claiming that the implementation of this promise was impossible, and Raisi was accused of deception. However, Raisi not only insisted on the feasibility of his promise but also claimed to have a several-hundred-page plan that he would implement if elected, which would save the country’s economy.
Now over two years have passed since the start of the Ibrahim Raisi government, but not only have none of the economic indicators improved, but almost all aspects have worsened, indicating a deep crisis in the housing market during the presidency of Ibrahim Raisi.
200,000 units instead of 4 million homes
The crisis was supposed to be resolved by constructing 4 million homes, but in the past week, while the Minister of Interior was inaugurating a 140-unit apartment complex, he emphasized the importance and magnitude of this project. This is despite the fact that even if the government manages to execute massive projects like this on a daily basis, by the end of the year, only 52,000 apartments have been built. This means that during the 4 years of Ibrahim Raisi’s presidency, approximately 200,000 units have been constructed, which is only a twentieth of the amount that Raisi promised during his campaign in the year 2021.
