Rents in the Iranian capital Tehran increased by 54 percent in January compared with last year, as annual inflation hovered around 40 percent and demand rose.
Real estate prices have increased sevenfold since 2018, which has put pressure on rents, experts say. Although home prices have not risen much in recent months, rents keep climbing because there is a time lag between purchase price increase and rents.
In some instances, rents equal the total income of a wage earner who is paid about $150 a month in a fulltime job. Meanwhile, food prices rose by 60 percent in 2021 compared with the previous year.
Home prices rose in local currency because real estate is a major asset protecting savings in a country like Iran where the national currency has lost value almost eightfold since 2017. In countries without an internationally accepted currency, wealth can disappear with devaluation and people rush to protect their capital.
Calculated in US dollars, real estate prices have stayed the same in four years.
Rising home prices in local currency pushed the middle class out of the market and increases demand for rentals.
Pundits and politicians in recent weeks have been warning of a social explosion in the country if the economy does not improve soon. Iran is negotiating with the United States over its nuclear program. An agreement can lift US sanctions and provide much-needed revenues.