The housing market in Iran (old Persia)

In Iran houses don’t always trade in the market the way they do in other countries, historically land and houses are passed on to children in the family to protect their wealth and assets (it isn’t just an Irish phenomenon).

Iran as we know it was changed from being called Persia to Iran by Reza Shah. He changed the name as he was in power trying to follow the footsteps of Ataturk as they were great friends and he used to look up to him and wanted to modernise the country.

Subsequently, his son Mohammad Reza Pahlavi at a very young age was placed into power to become the new King of Iran, he had studied in Switzerland and has always lived abroad and wanted to bring this idea of modernising and Europeanise and Americanise the country and the whole region.

From the early 1920’s when oil was explored and money was pouring in, the economy was booming and the fact that Iran is and always was a very rich country helped developed the infrastructure at an extremely fast speed, but the problem was that the older generation were not used to the fact that modernising the country meant that not everyone was happy with the fast change in life.

The revolution took place and all the focus was on the fact that all these wealth should be spread throughout the country and it should be a republic and not a kingdom and so on.

The fact remains that Iran has massive mineral deposits, great agricultural and other resources, like Persian carpet, pistachio, copper, marble and other natural stones to name a few, this physical wealth has sustained the nation and will continue to do so.

Now that we look back we can see that the population of Iran was 20 Million in the 70’s and now it is over 80 Million which means it quadrupled in forty years it has become very highly populated. All the neighbouring countries also rely heavily on trade with Iran (see: http://www.worldometers.info/world-population/iran-population/ )

Tehran is the capital of Iran and reports show that there are over 12million people live in that big city and also all other smaller cities around it commute back and forth on a daily basis, this ultimately makes the housing market so hard to control and in recent times the result is that prices are always on the rise.

In the last 10 years we have been watching the house prices in Iran and especially in Tehran climbing at an alarming rate.

The way it normally works is a boy grows up and then goes to college and when time is right and he and his family want him to get married and settle down. The man provides the housing for the bride and the bride has to provide the furniture and the furnishing of the house or the apartment or whatever their circumstances is.

This is fundamentally different to the way things work in Western society but as it is how it works in Iran it has to be considered as part of the general market forces, couples are unlikely to ‘co-rent’ as they may elsewhere.

Iran is going through a baby boom for the last 10 years and still continuing as the population is rising and this demographic trend has not finished yet.

The market is over heated, demand and prices are so high that people cannot afford to purchase any more, obviously there are fortunate ones who can, but the bulk of people are finding it difficult.

The system of rental is completely different to most places that we are used to, as when you want to rent a place, there is a massive down payment as a deposit otherwise the level of rent is so high that one would find it hard to pay specially with the very low level of income making it even harder to rent.

This has all created a uniquely difficult housing market in the most heavily populated urban centres in Iran and it demonstrates yet again that housing problems are not merely a western problem.

This is a guest post by M N A

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