The Share of Housing in the Expense Basket of Urban Households in Iran

The Open Data Iran database is an innovation project aimed at collecting data related to Iran in one place and presenting it in easily accessible formats. Radio Farda, in collaboration with this entity, publishes a series of articles, the first of which was titled 'What Do Iranians Die From?' Five other articles discussed the deep gender gap in student employment, the situation of farmers, and causes of mortality in Tehran and other provinces of Iran. The sixth article is as follows. Reports on household budget surveys in urban areas of Iran from 2005 to 2015, published by the Central Bank, show that housing costs have the largest share in the expense basket of the average household. On the other hand, the housing market in urban areas of Iran has been very turbulent in recent years, and the share of housing costs in the household expense basket has been almost continuously increasing. In the following lines, we will examine how significant this share has been and how it has changed over the ten-year period from 2005 to 2015. We will also show that the situation in the capital of Iran differs from the national average by examining the trend of changes in the share of housing costs in the expense basket of households in urban areas of Tehran during the same period. The share of housing in the expense basket of households in urban areas of the entire country. The examination of the trend of changes in the share of housing from the total expenses of urban households from 2005 to 2015 shows that this share has been a determining number in all the mentioned years. The average share of housing rent and related services such as water, electricity, and gas in the expense basket of an average household in urban areas of Iran increased from 26.9% in 2005 to 35% in 2015. Chart 1 illustrates the trend of changes in the share of housing costs in the household expense basket from 2005 to 2015. This chart clearly shows that although we have witnessed slight decreases in this share in years corresponding to the housing market recession, overall, the relative share of housing costs has been on the rise. The share of housing costs in the household budget increased by 8.1% over a ten-year period. To better understand this increase, it is worth noting that in 2015, the share of healthcare expenses in the budget of the same household was 5.8%, and the share of expenses related to recreation and cultural affairs was only 2%. The share of housing in the expense basket of households in urban areas of Tehran. But has the share of housing from household expenses been the same in all urban areas of Iran? Statistics from the Central Bank show that although the average share in the country in 2015 was 35%, this number varied from 12.6% in South Khorasan to 49.9% in Tehran province. The examination of the share of housing costs in the expense basket of urban households in Tehran province shows that the nearly 50% share in 2015 was not an isolated incident. As seen in Chart 2, the average housing costs in Tehran province in 2005 were about 7% higher than the national average; however, the situation worsened in Tehran during the mid-80s and early 90s. If the national average share of housing in household expenses in urban areas increased by about 8% from 2005 to 2015, this increase in Tehran province was nearly 16%. Conclusion: The increase in the share of housing in household budgets from 2005 to 2015, which has multiple reasons, indicates that pressure on other expense categories of urban Iranian households in general and urban households in Tehran in particular has increased during these years. This pressure forces urban households to spend an increasing share of their income on housing-related expenses each year, reducing the relative share of their other essential and welfare expenses.