In this equation, it must be noted that housing accounts for a great share of the spending of city dwellers. According to the Central Bank of Iran, the average urban Iranian family spends roughly a third of its budget on housing, including rent and utilities. Some researchers argue that housing-related expenses account for more than half of the average Iranian household’s annual spending.
Moreover, in recent years, housing costs have increased relative to other expenses. Central Bank figures show that housing as a share of the household consumption basket amounted to 26.9% in 2005. A decade later, in 2015, it had risen to 35%.
The housing recession, coupled with the declining purchasing power of Iranian households, has translated into increased demand for rental properties — similar to the experience in the United States after the subprime mortgage crisis. Indeed, in 2016, one-third of Iranians were living in rental properties — compared to 26.6% in 2011.
Iran’s Chamber of Commerce, Industries and Mining estimates that rent accounts for 70% of the average Iranian family’s housing expenditures.
Despite the increased demand for rental properties, the number of empty homes in Iran has increased. The Statistical Center of Iran announced last year that one out of every 10 residential properties in the country is vacant. The same survey revealed that more than 2.5 million housing units in Iran are unoccupied — 55% more than in 2011.
One is left to wonder about the reasons for this significant boost in empty properties since the housing supply increased by 17% during the same period. In Tehran, where many people are always searching for a place to live, 13% of available residential units are unoccupied. One key reason for this situation is that many property owners refuse to sell for less-than-expected returns.