Why house prices rise globally? what was the case in Tehran?
land resources are obviously scarce!
is this the only reason prices rise? The most important reason for this crisis is that we have been drastically restricting the amount of land available in Tehran, for housing since it was chosen as Iran's capital. Furthermore, after the revolution back in 1979, new policies and strategies led to dramatic immigration of people from farms, countries and villages or small towns in to the bigger and larger cities for more opportunities on employment and seeking a better quality of Life.
These are problems of market failure and land markets fail more than most, so they need regulation, which is what planning should do. But regulation needs to be informed by an understanding of how markets work. The problem is that our planning system seems to proceed as if it can entirely suspend the laws of supply and demand.
cost of living in Tehran...?
a couple living in mid-level style in Tehran needs:
350 USD per month rent (it can go as high as 2000+ USD per month for a two bedroom apartment)
200 USD per month for markets
100 USD per month to dine out once in a week (4 times a month)
100 USD per month transportation
50 USD per month utilities
I quit trips, vacations, sports, entertainments, parties, clothing extras etc
so they both need to have roughly 800 USD per month.
now more statistics and facts to know:
minimum wage in Iran is 200 USD per month
a 5 years experienced engineer or BS holder works for 350 USD per month
a 15 year experienced engineer or BS holder works for 500 USD per month
so they have to work hard both to live in a very simple mid-level life style with no extras!
luxury properties in Tehran
the price of an apartment in Tehran can vary from 1000 USD per sqm to 12,000 USD per sqm!
|North of Tehran - apartments: 5000 - 7000 USD per sqm|
Villas from 5 - 25 Million USD
|Kamraniyeh - apartments: 7000 - 10,000 USD per sqm|
|France, Royan - a 4 bedroom Villa for 400 USD per sqm|
400,000 USD for 1000 sqm plot and 240sqm villa
Iran and specifically Tehran's real estate market shows up with a boom every 5 or 6 years. this has been always like that in last half decade.
it seems that the market will have a smooth rise fitting the inflation rate only in 2015, till 2016 summer. then the prices have the potential again to racket up again.