Oil, gas and Iran economic analyst
New data from the Central Bank of Iran reveals that the average price per square meter of housing in Tehran hit 885 million rials (around $1,500) last month, leaving over half of renters with little hope of ever buying a home due to low income levels.
New data from the Central Bank of Iran reveals that the average price per square meter of housing in Tehran hit 885 million rials (around $1,500), leaving over half of renters with little hope of ever buying a home due to low-income levels.
According to the Central Bank’s estimates, housing prices have increased nearly elevenfold since the start of US sanctions in 2018 and have tripled in local currency over the past three years, during the presidency of Ebrahim Raisi. During the same period the rial fell 50% against the US dollar.
Although the figures provided by the Central Bank indicate a significant rise in housing prices, a loan expert at a private Iranian bank told Iran International that the actual increase in housing prices is much higher than what the Central Bank claims.
Chichek M, identified here by a pseudonym for security reasons, further explained that due to the obligation to offer loans, particularly mortgage loans, at interest rates below inflation, banks in the country have been incurring losses.
According to the latest official reports, Iran's seven largest banks collectively have accumulated losses of 4,640 trillion rials (about $7.7 billion).
Chichek added that while the country’s inflation rate is around 45%, the interest rate for bank loans is set at approximately 23%.
The Central Bank's statistics on housing prices also contradict figures from other governmental institutions. For instance, the Central Bank claims that the average price per square meter of housing in Tehran increased by 16.8% year-on-year in August, whereas the Statistical Center of Iran reports this figure to be 43%.
A significant portion of the soaring house prices in Iran is attributed to the devaluation of the rial against foreign currencies, particularly the US dollar. However, the Central Bank's detailed data reveals that even accounting for currency fluctuations, housing prices have nearly doubled in dollar terms.
The exchange rate of the US dollar has jumped from 40,000 rials in early 2018 to around 600,000 rials, marking a 600% increase. However, during the same period, housing prices have surged by 1,000%, based on Iranian rial.
One reason for the faster rise in housing inflation compared to the rial’s depreciation against the dollar is the government's failure to build new housing. Another factor is the rush of people’s rial-based assets into the housing market as a way to preserve their value.
For example, President Ebrahim Raisi promised to build one million housing units annually, but Mohammadreza Rezaei Kochi, the head of the Parliament’s Construction Committee, says this plan has only achieved 2% progress: “Over the past three years, only a small portion of the previous government’s unfinished projects have been completed and handed over to the public”.
Meanwhile, the ISNA news agency reported on September 22, citing new Central Bank data, that 51% of Tehran's population cannot afford to buy a home priced at 885 trillion rials per square meter.
The report adds that 51% of Tehranian households are renters, who, in addition to facing 45% inflation in rental costs, would have to wait 48 years to purchase a home.
ISNA notes that housing has become a major crisis for everyone in recent years. It describes homeownership as a dream for many Iranians, one that they may never realize in their lifetime.
"Our shores have experienced significant retreat, raising concerns that our facilities and ports could be in jeopardy," an Iranian Environmental Protection Organization official, Omid Sedighi, told local media.
"Addressing this issue entails considerable expense, as extensive dredging is required to restore water access to the docks and ports. This poses a substantial threat," he added.
Addressing the challenges faced, Sedighi noted that the country's coastlines have "significantly receded," placing critical infrastructure, such as facilities and ports, at risk. He warned that if the current trend of declining water levels continues, it could lead to the drying up of other wetlands, render docks and ports inaccessible, and create serious issues for coastal power plants. Furthermore, he expressed concern that the situation could also jeopardize shrimp farming operations.
His remarks mirror concerns that Iranian officials have voiced for years. Last year, Iran’s Minister of Interior, Ahmad Vahidi, warned of the Caspian Sea's further decline in the coming decades, while refraining from addressing the regime’s neglect of ecological issues.
Similarly, Ali Salajegheh, head of the Iranian Department of Environment, underscored the ecological challenges posed by a one-meter reduction in the Caspian Sea's water level over the past 4-5 years, noting an average annual decline of 20 centimeters.
However, the predicament transcends Iran's borders. The Caspian Sea is bordered by Iran to the south, Turkmenistan to the southeast, Kazakhstan to the northeast, Russia to the northwest, and Azerbaijan to the southwest.
Scientific studies have revealed that the Caspian Sea's water levels, which have exhibited sharp fluctuations over the past century, have steadily declined since the mid-1990s.
However, since 2005, conditions have deteriorated even further. Russia's Volga River, which constitutes approximately 80 percent of the total water inflow into the Caspian Sea, has been a focal point of blame among the nations concerned with the sea's declining levels.
Earlier this month, expressing deep concern over the "catastrophic" shrinkage of the Caspian Sea, Azerbaijani President Ilham Aliyev discussed the matter with Russian President Vladimir Putin.
Last year, Kazakhstani officials declared a state of emergency in response to the recession of the shoreline, with the Environment Minister attributing the primary causes to “climate change as an exogenous factor” and the upstream “regulation” of rivers that feed into the lake, including the Volga and Ural, both originating in Russia.
According to NASA's Earth Observatory, a study utilizing several models projected that the Caspian Sea's water levels could decline by an additional 8 to 30 meters (26 to 98 feet) by 2100 due to climate change. Moreover, human activities such as water use and diversion could contribute to a further 7 meters (23 feet) of water loss. These projections underscore the significant impact of both natural and anthropogenic factors on the future of the Caspian Sea's water levels.
According to a study published in Nature, "a decline by 9–18 meters will mean that the vast northern Caspian shelf, the Turkmen shelf in the southeast, and all coastal areas in the middle and southern Caspian Sea emerge from under the sea surface. In addition, the Kara-Bogaz-Gol Bay on the eastern margin will be completely desiccated. Overall, the Caspian Sea’s surface area will shrink by 23 percent for a 9 meter and by 34 percent for an 18 meter drop of sea level." Scholar Vali Kaleji emphasizes that to address this critical issue, Caspian coastal nations must prioritize integrated, coordinated, and comprehensive policies and strategies.
Stopping short of pledging any direct action by the Jewish state itself, Netanyahu said the Iranian theocratic system that his country was confronting would soon end.
The 3-minute speech delivered in English and posted on X came days after Israeli air strikes killed Hezbollah chief Hassan Nasrallah, capping off nearly two weeks of bombings and aerial bombardments which have decapitated the Iran-backed group's leadership.
"When Iran is finally free and that moment will come a lot sooner than people think – everything will be different," Netanyahu said.
"Our two countries, Israel and Iran, will be at peace. When that day comes, the terror network that the regime built in five continents will be bankrupt, dismantled.
Netanyahu said that there was nowhere in the Middle East beyond Israel's reach, a message underscored by Israeli air attacks in Gaza, Yemen and Lebanon over the weekend.
Both Iranian and Israeli leaders have appeared to hold off from any clear pledge of direct confrontation despite the latest uptick in violence.
The response from some in the Iranian diaspora and activist community has been positive, with many sharing Netanyahu's sentiments on Iran.
"Israel and free Iran will reunite as the great allies in the Middle East again", Iranian-American activist Nick Nikbakht posted to X.
Gazelle Sharmahd, the daughter of Jamshid Sharmahd, a German-American national of Iranian descent who was kidnapped for his activism from the United Arab Emirates in 2020 by Iranian agents, thanked the Prime Minister as the "only leader of a nation who directly addresses the people of Iran."
"We agree with everything you said EXCEPT for 1 point: Those khomeinist tyrants are NOT the “leaders of Iran”!!!!" Sharmahd posted to X.
Ellie Cohanim, a former Deputy Special Envoy to Monitor and Combat Anti-Semitism during the Donald Trump administration, told Iran International that Netanyahu's speech demonstrated that Israelis and Iranians have one foe.
“(The) historic address to speak directly to the Iranian people is meant to clearly communicate to Iranians that they and Israel share a common enemy—the Islamic Republic Regime. And also to let Iranian people know that any military events and conflict are between the Regime and Israel; and not between Israel and the Iranian people.”
This was not the Israeli Prime Minister's first time addressing the people of Iran.
During an earlier premiership he spoke directly to Iranians in a 2013 an interview with BBC Persian, saying, "I would welcome a genuine rapprochement, a genuine effort to stop the nuclear program - not a fake one. Not 'harfe pooch,'" deploying a colloquial Persian phrase meaning "empty words."
Still, he was mocked for comments he made about Iranians not being able to wear jeans in the country, which some critics said showed ignorance of the way Iranians actually live.
Israel's military has long been using the social media channel IDF Farsi to speak directly to people in Iran and circumvent authorities' censorship, gaining access to tens of millions of Iranians online.
“We wanted to build a bridge to the Iranian people," Beni Sabti, the driving force behind the account, told Iran International in a previous interview.
