Domestic Economy
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Origins of Rental Market Crisis

Origins of Rental Market Crisis
Origins of Rental Market Crisis

At times, axioms of economics are not properly understood in Iran and the causality principle is misinterpreted. 
For instance, a rise in rent rates, which is the result of increasing property prices, is being explained abstractly, Gholamreza Salami, a housing expert, says. A translation of his article for the Persian economic daily Donya-e-Eqtesad follows:
The rising prices of residential properties is usually viewed as a cause, whereas it is the effect of other causes that stem from government decisions. 
How do we perceive the price of an item as high? Compared with the current salaries of workers, everything is expensive. The price of a kilogram of meat or a liter of milk is much more expensive for an Iranian worker than a German or Dutch worker, but when compared with the value of the euro or iron beams, they do not seem expensive. A comparison of the price of euro and iron beams in 2011-12 with the average price of per square meter of housing shows that even in Tehran, the latter was not more expensive than in 2011-12, but housing prices have definitely increased in view of the purchasing power of people.  

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