What is the cost of living in Tehran?

How much does it cost to live in Tehran?

How much does it cost to live in Tehran? According to Iran Gate, while the inflation rate in Iran has broken its 70-year record, the cost of living in various cities across the country has significantly increased. However, reports indicate an unprecedented rise in the cost of living in the capital. Some believe that in the coming years and months, we should expect reverse migration from Tehran to smaller cities.

For many Iranian citizens, Tehran is seen as a sea of opportunities, where one only needs the will to seize them. However, Tehran residents believe that the cost of living in the capital is so high that despite the bustling job market, living in this city is not economically or socially viable. Nonetheless, many Iranian citizens believe that those who can maintain steady employment in this job market can manage these costs.

But the question remains: how much does it really cost to live in Tehran? In this report, the relative cost of living in the capital has been calculated, which will be discussed further.

Housing costs in Tehran

Recently, statistics on housing inflation in Tehran were published, indicating a 115% year-on-year inflation rate in April 2023. However, the government of Ebrahim Raisi and the Central Bank have not released any housing market statistics for about six months. Field observations show that the average price per square meter in the capital is about 85 million tomans, which, with the free market exchange rate of 52,000 tomans per dollar in June 2023, is equivalent to 1,600 dollars.

Assuming a minimum wage of 10 million tomans, it would take over 50 years to purchase a 70-square-meter apartment without spending a single rial of the 10 million toman salary. If one-third of the income is saved, assuming zero percent inflation, it would take over 150 years for a minimum wage earner to be able to buy an apartment unit.

Considering the published statistics on housing purchase prices, it’s almost obvious that newcomers from smaller cities cannot afford to buy an apartment initially. As a result, the rental housing market in Tehran is very active and full of demand. According to statistics published by domestic media, the average deposit for a residential property is approximately 12 million tomans with the 52,000 toman dollar. The monthly rent for each square meter of residential property in Tehran is approximately 65 dollars, which is about 350,000 tomans. Thus, the average monthly rent for an apartment in Tehran is equivalent to 450 dollars, more than 23 million tomans per month.

The average cost of a full deposit for a 70-square-meter property is approximately 850 million tomans, calculated with the 52,000 toman dollar.

Transportation costs in Tehran

The public transportation system in Tehran faces widespread issues and deficiencies. However, many Tehran residents use the urban rail network, the metro. Currently, metro ticket prices range from a minimum of 2,300 tomans to a maximum of 3,500 tomans. The cost of the shortest taxi ride is about 10,000 tomans, and a bus ticket is equivalent to 1,500 tomans. The market for online taxi apps is also thriving in Tehran, with the average monthly cost for using these services estimated at 100 to 150 dollars, which, with the 52,000 toman dollar, is estimated to be about 5 million to 7.5 million tomans.

Transportation costs in Tehran should also be evaluated concerning car prices and compared to major cities in the region. For example, a 5-year-old Toyota or Hyundai with 100,000 kilometers on the clock in Tehran costs about 4 to 6 times the price of the same new model in major cities of the same rank in the region and even the world. Thus, buying a used foreign car for newly arrived Tehran residents is almost impossible, and even to purchase a new Iranian car, one needs at least 400 million tomans in their account, which is almost impossible for newcomers considering their living conditions.

All these costs are almost equivalent to the time citizens must spend in traffic, as factors such as air pollution, social unrest, and ongoing societal disorders, in addition to time wastage, must also be considered.

Food and clothing costs in Tehran

There are no specific figures available for clothing costs 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 specific figures, but newcomers should consider that they will face significantly higher costs for food and clothing in Tehran compared to smaller cities.

The cost of eating a meal in Tehran’s restaurants is incomparable to that of smaller cities in the country. Perhaps this is the only factor where specific statistics can be accessed. On average, the price of a meal in Tehran’s restaurants is about 6 dollars, equivalent to 300,000 tomans. Meanwhile, the average price of a traditional meal in smaller cities is about 3.5 to 4.5 dollars, equivalent to 175,000 to 225,000 tomans, showing a difference of about 75 to 85 percent.

The cost of having a cup of coffee and a piece of cake in Tehran’s cafes is also, on average, about 3.5 to 4 dollars. In contrast, the price of the mentioned items in cafes in other smaller cities in the country is equivalent to 1.5 to 2 dollars, showing about a 100 percent difference.

Living in Tehran

Based on the reviewed factors, it can be said that the average cost of living for a family of four in Tehran is approximately 1,000 dollars, more than 50 million tomans per month. This cost is calculated assuming the use of rental housing, public transportation, and completely ordinary food and clothing. Naturally, there may be families living in Tehran with much lower figures or many others experiencing a more expensive lifestyle.

Therefore, it is expected that heads of families of four should have a combined monthly income of more than 70 million tomans to have a decent life and be able to save or invest about 35 percent. But can individuals earn such an income in Tehran? We must refer back to the introduction of this report because the job market in Tehran is very vibrant and bustling, but it’s important to note that individuals have different talents and abilities that can lead to earning tens of millions of tomans.