Amid economic crisis, residential real estate prices are rising astronomically in suburbs of Iran’s capital Tehran, with some areas witnessing a 100-500 percent annual increases.
The seeming contradiction is mainly the result of the devaluation of Iran’s currency rial, which has compelled sellers to demand higher prices for what they see as the real value of their properties.
The rial has fallen fourfold in two years, forcing property owners to think about prices in dollar terms, which leads to much higher asking prices in local currency.
In fact, housing prices calculated in dollars have not risen at all.
In the city itself, housing prices have jumped 215 percent in two years, less than in some suburbs, reports ISNA news website.
Another contradiction in the housing market is a huge drop in sales while prices rise. This shows the dwindling purchasing power of buyers and the high price expectation of sellers.
Buying real estate is also a hedge against economic uncertainty and the devaluation of rial.
Iran’s Central Bank reports that the average price of one square meter of a residential property in Tehran is around $1,000, or $93 per sq foot. Compared to prices in other major capitals of the world this is a modest amount, but the monthly income of an average working Iranian is less than $300, due to the currency devaluation.