Mandatory extension of lease contracts—after factoring in a predetermined increase in rental payments—shall remain in force in the current Iranian year (started March 21), says Deputy Minister of Roads and Urban Development Mahmoud Mahmoudzadeh.
“The measure introduced by the government last year, which suspended landlords’ ability to forfeit a lease as long as the country was battling Covid-19 will remain in place for three months after the end of the health crisis is declared officially,” he was quoted as saying by IRNA.
Tenancy agreements signed after June 29, 2020, should not have entailed a rent increase of more than 25% in Tehran, 20% in large cities with a population of over one million, namely Mashhad, Isfahan, Tabriz, Ahvaz, Qom, Shiraz and Karaj, and 15% in other Iranian cities.
“The government has yet to determine the increase in rent payments to be applied this year,” Mahmoudzadeh said.
The official noted that, “A total of 920,000 registered for security deposit assistance loans last year, of whom 335,000 met the requirements and 220,000 received 46,000 billion rials ($184.73 million) in loans. The government had allocated a much larger sum to the program but most tenants did not meet the general requirements for getting the loans.”
Last year, Governor of the Central Bank of Iran Abdolnasser Hemmati said a total of 200 trillion rials ($803.21 million) out of the 750-trillion-rial ($3.01 billion) coronavirus bailout had been allocated to low-income renters as security deposit assistance at the lending rate of 13%.
The interest-only security deposit loans worth 500 million rials ($2,008) in Tehran, 300 million rials ($1,204) in large cities with a population over one million and 150 million rials ($602) in other Iranian cities were paid to assist tenants struggling to pay their rent during the Covid-19 pandemic. Applicants needed to pay back the principal after a year.
Latest data released by the Central Bank of Iran show the price of rented residential homes in Tehran and across urban areas increased by 31.4% and 35.2% respectively during the 12th month of the last Iranian year (Feb. 19-March 20) compared with the corresponding month of the year before.
According to the Statistical Center of Iran, the average Consumer Price Index for housing rent in urban areas during the four-quarter period ending Dec. 20, which marks the end of the third quarter of the current Iranian year (fall), increased by 26% compared with the corresponding period of last year.
SCI had put the inflation rate for the preceding quarter (summer), which ended on Sept. 21, at 24.3%.
The highest inflation was registered for Chaharmahal-Bakhtiari Province with 32.8% and the lowest rate was posted for West Azarbaijan with 13.3%.
According to the SCI report, CPI for rent levels in urban areas (using the Iranian year to March 2017 as the base year) stood at 209 in the third quarter of the current Iranian year (Sept. 22-Dec. 20), indicating a 6.8% increase compared with the previous quarter.
SCI had put the quarter-on-quarter rent inflation rate for the preceding quarter, which ended on Sept. 21, at 11.8%.
West Azarbaijan and Sistan-Baluchestan provinces registered the highest and lowest quarter-on-quarter inflation rates for tenants in urban areas with 19% and 3.9%, respectively.
The consumer rent price index in urban areas increased by 28.4% in Q3 over the same quarter of last year.
SCI had put the year-on-year rent inflation rate for the preceding quarter at 28.9%.
The highest and lowest inflation rates on a year-on-year basis in the third quarter of the current year were posted by Kermanshah with 38.6% and Sistan-Baluchestan with 12.7%.
