Housing Deposit Loans Increased, Landlords Raised Rent by 50%

A Tehran-based newspaper reported on the rental housing market in the capital, stating that alongside the increase of housing deposit loans to 200 million tomans, landlords also raised rents by 50%. The newspaper Etemad, in its issue on Tuesday, August 29, quoted the first vice president of the Tehran Real Estate Agents Union, who said, "Housing deposit facilities have created an inflammatory effect in the rental housing market." Davood Biginejad noted that the payment of housing deposits has posed many challenges to the rental market, as many landlords believed that a significant portion of the banks' financial resource shortages had been resolved and attempted to raise the deposit amounts for tenants. According to the first vice president of the Tehran Real Estate Agents Union, rental prices in some areas of Tehran have increased by up to 50%, and if the payment of housing deposit facilities had a positive impact on the rental market, such unregulated growth in rental prices would not have occurred. Reports indicate that rental inflation in July exceeded an annual rate of 39%. Some experts attribute this record-breaking rental inflation to the surge in housing prices in recent months and the persistence of inflation at high levels. The government has put increasing housing deposits and setting a cap on rent increases on its agenda as ways to control the rental market, which has led to an increase in rents. On the other hand, landlords have not accepted the cap. In this context, media have reported various ways landlords are circumventing this government directive. In this regard, the newspaper Ham-Mihan reported on August 6 that a look at rental and sales listings shows "cases of rent in dollars have been heard in areas one and two of Tehran." Ham-Mihan emphasized that the prevalence of renting in foreign currencies or precious metals is a way to circumvent the rent cap law and also to evade taxes. The 50% increase in rents comes at a time when last summer, the Research Center of the Parliament reported on the increase of income deciles being expelled from the housing market, stating that income deciles one to three are absolutely unable to secure the housing they need, and even deciles three to five and parts of the sixth decile are "relatively" unable to do so. Rental prices continue to break records; ISNA reported a 70% increase in Tehran. The number of landlords seeking "roommates" to cover housing costs has increased. A trade official reported a 50% increase in rents in some areas of Tehran. Rental inflation has surpassed 43%; the government cap has failed in the rental market. Room rents in central Tehran have exceeded 10 million tomans; boarding houses have become unattainable. A 42% increase in house rents was reported in Farvardin; tenants are suffering.