Rent spikes leave Iranian tenants desperate as economic turmoil and war risk persist

Tehran, Iran – When Mohammad, a 29-year-old resident of west Tehran, renewed his lease earlier this week, the rent hike came as no surprise.

The landlord raised the monthly rent for the 20-year-old apartment to 230 million rials (about $130) from 130 million rials ($73), while keeping the deposit at 5 billion rials ($2,800 at current exchange rates) — a sum that is rapidly losing value.

Iran’s monthly minimum wage is roughly $90, rising to around $120 when including government subsidies, electronic vouchers, and marriage or housing allowances. Most tenants are believed to live below the poverty line, with the average family income around 700 million rials ($400) per month.

“I think the landlord was happy to renew for another year because of market conditions, and I wanted to stay because the increase could have been worse,” said Mohammad, who works as a driver for a ride-hailing app, speaking to Al Jazeera.

He noted that his neighbourhood had not been directly targeted in the US and Israeli air strikes that ended in late February, after a fragile ceasefire halted more than a month of attacks.

Cheaper alternatives to the 60-square-metre (645-square-foot) flat would be smaller, older, or located in southern Tehran — adding an extra hour to his daily commute, he said.

For many Iranians who do not own homes, income and spending are barely aligned, forcing them to shell out a huge amount for modest shelter or to make compromises. According to the Statistical Centre of Iran, rents rose 31 percent year-on-year in Farvardin, the first month of the Persian calendar that ended on April 20.

No official figures exist for Tehran, but local media and real estate agents’ reports indicate that rents in the capital are now 30–40 percent higher than last year on average. Areas less affected by the war are seeing faster increases.

Technically, these figures are below the year-on-year inflation rate, which stood at 73 percent in the same month and is believed to have risen further in recent weeks, as the war’s impact strains Iran’s already weak and sanctions-hit economy.

But even before the war, rents were already extremely high after years of unchecked increases. Wages have not kept pace, making annual lease renewals a source of anxiety for many.

A real estate agent in Tehran told Al Jazeera that fewer leases are being signed due to uncertainty over the possible resumption of hostilities amid an economic downturn.

“Prices are changing lifestyles in the rental market; I see people looking for roommates to halve the cost, others returning to smaller cities or the suburbs, and some moving back in with their parents,” said the 45-year-old agent. He added that purchase prices have also risen significantly, in some areas even exceeding inflation. Rapidly increasing construction material costs are also pressuring contractors, some of whom have paused work to see if the war ends.

Facing budget pressure from US and UN sanctions, government support is limited. Earlier this month, the Tehran Real Estate Agents Association cited the Supreme National Security Council as saying that leases expiring during wartime may be automatically extended for up to two months.

The authorities have also set a 25 percent cap on annual rent increases, but local media report that this figure has effectively become a floor, not a binding ceiling, in rental transactions. The government also provides loans to help tenants pay deposits.

Loan amounts reach up to 3.65 billion rials ($2,050) in Tehran, dropping to 2.8 billion rials ($1,582) in provincial capitals, 1.85 billion rials ($1,050) in other cities, and 750 million rials ($420) in villages. While these sums may help some tenants, they are often insufficient, especially in Tehran, where deposits are many times the loan allocated for a family apartment in many districts.

Targeted emergency relief is also available for those who lost their homes in the war or suffered damage. They are provided temporary accommodation in hotels by the Tehran government or local authorities. Affected households are also eligible for additional rental deposit assistance. Bombings may cause some legal issues for tenants of damaged homes, as those houses do not automatically void lease obligations.

According to the ILNA news agency, the obligation to pay rent generally remains unless the apartment has a defect or damage that makes it uninhabitable. Tenants are advised to consult dispute resolution councils set up to adjudicate civil cases if needed.

Looking ahead, housing prices are expected to rise, similar to other economic sectors stuck in a “no war, no peace” state. On Monday, US President Donald Trump said he had postponed a strike on Iran originally planned for Tuesday at the request of Gulf allies, but warned the military could still attack if no deal is reached.

“We fight, but we have problems. There will certainly be more inflation. Those who fight must endure hardship,” Iranian President Masoud Pezeshkian said on Monday.

A woman who gave her surname as Rezaei told Al Jazeera in central Tehran that current prices are not comparable to last month, and have risen further in recent days. “I bought a lot of things last week, and now their prices have doubled. My purchasing power has fallen by at least 70 percent; everyone’s purchasing power has dropped a lot,” she said.