Special Committee to Control Rents in Iran

EghtesadOnline: The Ministry of Roads and Urban Development will set up a special committee to set rental rates to ensure they won’t exceed consumer inflation, the director of Housing Investment and Economy Department said.

News ID: ۷۴۷۳۹۴

22 May 2019

“The committee will consist of nine representatives from the private sector, parliament, real estate agents and the Central Bank of Iran,” Abbas Farhadieh was also quoted as saying by IRIB News

“The committee does not intend to intervene in rental housing deals and will just inform people of rental rates and fees. The government will not impose punitive measures when it comes to rental housing deals, but rather it will give incentives like tax credits to landlords who charge rent fees within the specified range set by the committee.”

The Statistical Center of Iran's latest report shows average rent prices increased by 21.7% during the fourth quarter of last year (December 22, 2018-March 20, 2019) compared with Q4 of the year before while they grew by 1.9% compared with the third quarter of last year, according to Financial Tribune.

The minimum price of each square meter of residential floor area rented in Iran’s Tehran stood at 28,000 rials (20 cents) with the maximum being 1.71 million ($12) bringing the average to 343,067 rials ($2.45) per month.

Compared with the fourth quarter of the year before, the number of last year’s fourth quarter rent deals decreased by 18.8% whereas they fell by 10.3% compared with last year’s Q3.

SCI reported the average area of total rent deals at 78 square meters and put the average age of rental homes at 14 years.

SCI's latest data also show the Consumer Price Index calculated for the “tenancy” sector stood at 140.2 in the Iranian month ending April 20, indicating a 1.7% rise compared with the previous month.

The “tenancy” consumer price index registered a year-on-year increase of 24.7% compared with the similar month of last year.

The Consumer Price Index of “tenancy” subgroup in the 12-month period ending April 20 increased by 19.7% compared with last year’s corresponding period, SCI said.

The “tenancy” CPI registered a year-on-year increase of 25.1% for urban areas and 18.7 % for rural areas in the month ending April 20 compared with the similar month of last year.

SCI put urban and rural 12-month inflation for “tenancy” sector in the same month at 20.1% and 14.6%.

The overall CPI of “tenancy” subgroup reached 140.8 for urban households and 132.2 for rural households, indicating an increase of 1.7% for urban and 1.6% for rural areas compared with the previous month.

According to the Central Bank of Iran, the price of rented residential units in Tehran and across all urban areas of Iran increased by 21.9% and 18.8% respectively during the first month of the current year compared with the similar period of last year.

Consumer Inflation

Latest reports on Iran's inflation rate show consumer inflation in Iran registered a year-on-year increase of 51.4% in the month to April 20 compared with the similar month of last year.

CPI (using the Iranian year to March 2017 as the base year) stood at 170.9, indicating a 4% rise compared with the previous month.

The average goods and services Consumer Price Index in the 12-month period ending April 20 increased by 30.6% compared with last year’s corresponding period.

SCI had put the average annual inflation rate for the preceding Iranian month, which ended on March 20 at 26.9%.

Consumer price inflation in rural areas has been persisting at a higher rate than that in urban areas. The index registered a year-on-year increase of 50% for urban areas and 59.4% for rural areas compared with the similar month of last year.

The overall CPI reached 169.3 for urban households and 180.1 for rural households, indicating an increase of 3.7% for urban areas and 5.8% for rural areas compared with the previous month.

SCI put average annual inflation for urban and rural areas at 30.2% and 32.6% respectively.