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Iran’s Housing Crisis Deepens As Inflation Soars

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Iran is grappling with a dire housing shortfall with an annual need for one million homes but only 200,000 being constructed.

In a recent interview with Entekhab, housing expert Beitollah Sattarian highlighted the economic barriers that have made housing an “ultra-luxury and unattainable commodity” for most Iranians, except for a privileged class that thrives on a rentier and corrupt economy.

Against this backdrop, Iran’s Central Bank reported an annual inflation rate of 52.3 percent last year—the highest rate in eight decades—which has exacerbated the housing crisis.

Sattarian criticized the country’s macroeconomic policies for nurturing a “super-capitalist rentier economy” within a closed state framework, pushing a large segment of the population toward poverty.

The newspaper Etemad echoed the sentiments, noting that the poverty rate has increased by 10 percent over the past two years, adding approximately eight million people to the nation’s poor.

“The new year, like the past fifty years, is a year of expensive housing … When housing prices increase, all connected parameters, including rent, will increase. We may have much more than a 40 percent increase in prices and rents,” noted Sattarian.

During his election campaign, President Ebrahim Raisi had promised to build one million homes annually but so far, the shortfall only continues to worsen. 

After intensifying criticisms of the government’s failure to fulfill the promise, First Vice President Mohammad Mokhber said: “There is a difference between building housing and constructing it by the government. The government should build part of it; we can give land to the people so they can build it themselves.”

Sattarian predicts that housing prices will continue to rise sharply this year, possibly exceeding a 40 percent increase, as all connected parameters, including rent, escalate. The prediction is supported by official reports indicating a 52 percent increase in house rents in the capital over the past year.

Rents have surged by an average of 130 percent across Tehran and other cities, making housing costs a predominant economic concern among Iranians.