Record prices, diminishing affordability, and structural mismanagement push millions of Iranian families to the brink
Tehran’s housing market has plunged into one of its most severe crises in recent years, with soaring prices, collapsing purchasing power, and a rapidly shrinking supply of new homes. According to the state-run daily Bahar News, the average price of residential property in the capital reached 125.8 million tomans per square meter in September 2025. This historic surge has occurred even as real consumer demand has sharply declined, a trend driven by the erosion of household savings and the growing impossibility of obtaining adequate housing loans.
The market has entered a phase of deep stagflation, where high prices coincide with minimal transactions. Data indicate that the supply of residential units in Tehran has fallen by nearly half compared to the previous year, while overall sales have dropped to their lowest point in months. Experts describe a climate of absolute uncertainty, with both buyers and sellers waiting for clarity as they track political and economic signals that could reshape market expectations. Housing specialist Mehdi Soltan-Mohammadi emphasized that the sector is effectively frozen, with activity subdued and confidence eroded.
This crisis is not limited to the price of property. It is reshaping the everyday lives of millions of residents. More than half of Tehran’s population now lives in rental housing, and the dream of homeownership has slipped out of reach not only for low-income families but for increasing segments of the middle class. The affordability gap has widened so dramatically that owning a home has become an aspiration disconnected from economic reality.
The strain on household budgets is most visible in the rental market. Bahar News reports that rent absorbs between 65 and 70 percent of household expenditures in major cities, while in smaller towns it consumes around half of total income. These figures are entirely incompatible with the wages of retirees and workers whose incomes have not kept pace with inflation. The situation has become one of survival rather than planning, as families struggle to maintain basic living conditions without any meaningful relief from the state.
What Iran faces is not merely an economic crisis but a structural and managerial failure. Slow housing production, uncontrolled rent inflation, and the government’s inability to enforce or implement strategic housing policies have pushed the sector into prolonged instability. Without coordinated and serious action from state institutions, no realistic improvement appears possible.
Workers are among the hardest hit. A laborer earning 15 million tomans a month cannot meaningfully participate in national housing initiatives that require far greater financial capacity. Experts note that workers now spend up to 80 percent of their income on housing alone, a burden made worse by soaring prices of essential goods such as dairy and poultry that increase week after week without accountability. Workers also lack real representation in decision-making structures, including the wage-setting council, where government decisions routinely bypass labor input. Without an authoritative voice, they cannot compel the state to meet its obligations or implement policies that ease their living conditions.
The gap between wages and housing costs has widened to the point where the government’s housing promises ring hollow. As inflation accelerates and daily living becomes increasingly expensive, workers see homeownership as an unattainable ideal. Even the administration’s national housing slogans lack credibility in the face of a market defined by volatility, stagnation, and severe inequality.
Tehran’s housing crisis is now a defining feature of economic life in Iran. With millions of families under crushing financial pressure and no structural reforms in sight, the situation has transformed into a long-term challenge that touches every aspect of social stability and economic security.
