Commuters pass under neath tower blocks and faded banners depicting Iran’s religious leaders while crossing a street in Tehran. (Bloomberg)

December 17, 2021

“Unfortunately, according to statistics, Tehran is the most expensive capital in the world in terms of house prices,” Esmaeil Hosseinzehi, deputy chairman of the Iranian parliament’s Development Committee , told ISNA news agency on December 11, 2001. “Some people who lost their capital in the stock market have today brought the rest it into the housing market, with a view to gain. Real estate companies also play an important role in the astronomical housing prices, especially in Tehran.”

Is Tehran the most expensive capital in the world in which to buy a house?  In this report, IranWire tries to answer this question.

House Prices in Tehran: What We Know

In its latest report on housing market developments in Tehran for October 2021, the Central Bank of Iran put the average house price in Tehran at 31,630,000 tomans per square meter. The price of the dollar on the open market on October 19, 2021 was 27,340 tomans, meaning on average, each square meter of floorspace in Tehran sold for about $1157 two months ago.

If measured solely on this basis, then Hong Kong has been the most expensive city in the world in which to buy a home for several years running now. Average costs have stood at between $24,000 and $28,000 per square meter, depending on the location of the property within the city.

Meanwhile, a 2020 survey by estate agents CBRE took in average property prices in cities across the globe. Hong Kong was also listed as the most expensive here in terms of the average overall cost of a home, at $1,254,442, followed by Munich, Singapore, Shanghai, Shenzhen, Beijing, Vancouver, Los Angeles, Paris and New York, with an average property price of $649,026.

Tehran did not feature on the list. According to the Central Bank’s report, in October 2021 the average cost of a single residential unit stood at less than 2 billion tomans, or $66,556. Just 15 percent of all properties sold in Tehran that month were priced above 6 billion tomans, or close to $200,000.

Based on the CBRE’s findings, this would put average house prices in Tehran at somewhat cheaper than in Istanbul ($79,000) and a little more expensive than in Casablanca ($57,000). Had it featured on the estate agent’s list, on this criteria Tehran would have ranked around the 30th most expensive city, and far from the most expensive capital.

What About Cost of Living?

Aside from house prices, the cost of living in Tehran is also a factor in whether or not buying a home can be construed as “expensive”. The Economist’s 2021 index ranked 173 cities in order of average cost of living by comparing 400 individual prices across 200 products and services. This year it ranked Tehran the 29th most expensive city in the world to live in, having leapt from 79th place in 2020, and 106th in 2019. The 50-point increase was described by authors as “staggering”, with sanctions cited as the root cause for last year’s shock 40 percent inflation rate.

Based on The Economist’s survey, however, the top ten most expensive cities in the world in terms of cost of living were listed as Tel Aviv, Paris, Singapore, Zurich, Hong Kong, New York, Geneva, Copenhagen, Los Angeles and Osaka.

House Prices to Income Ratio

Cost of living also only tells part of the story. Inflation across Iran has skyrocketed in the past few years, while for many citizens, income has stagnated. This has made buying a property unaffordable to many Iranians despite comparatively “low” prices.

The house price to income ratio compares the cost of an average 100 square meter unit of housing to the country’s GDP per capita. Based on this metric Tehran appears to be one of – but not the – most expensive cities, and still not the most expensive capital city, in which to buy a home. The World Bank’s latest estimate of Iran’s per capita GDP, for 2020, stood at $2,282. Based on the stated October price of $1,157 for a square meter of housing in Tehran, the ratio is calculated as follows:

1157/2282 * 100 = 50.7

In other words, the cost of a 100-square-meter home in Tehran costs 50.7 times average income; possibly more, if Iran’s GDP per capita decreased further in 2021. This seems to agree with calculations by consumer price database Numbeo, which put the ratio for Tehran at 52.69 in mid-2021 – well ahead of other major capitals including Beijing (42.47), Tel Aviv (20.85) and London (13.37).

Despite this, even according to this metric Tehran is not understood to be the most expensive. Damascus, the capital of Syria, topped the list with a house price to earnings ratio of 78.42, followed by Accra in Ghana at 58.14, while Tehran took third place.

In August 2021, Hamshahri newspaper published an article on house prices in Iran that stated: “The average price per square meter of residential buildings in Tehran has reached 30 million tomans; in these circumstances, the average Tehrani household will have to wait 77 years to buy a 75-square meter apartment with an average of one-third of its total annual income.” Based on the above, this assessment seems reasonable.


“Unfortunately, according to statistics, Tehran is the most expensive capital in the world in terms of house prices,” said Esmaeil Hosseinzehi, deputy chairman of the Iranian parliament’s Development Committee, in a recent interview with ISNA.

IranWire’s surveys show this claim was wide of the mark. The average cost of a residential unit in Tehran, sold in October, was about $66,556: not even enough to place it in the top 40 most costly cities in the world, or the top 10 most expensive capitals, based on house prices alone.

Even if Hosseinzehi was using “expensive” in terms of relative affordability, he would not have been accurate. The cost of living in Tehran has soared in the past year, but the so-far calculated house price to income ratio, 50.7 to 52.7, is still by some way not the highest in the world. Damascus, the capital of Syria, records a higher ratio based on available data. IranWire therefore finds this claim to be not true.

Not true: A false statement about a specific new event or something that has not been proven to be true before, using existing facts and evidence.

Iran Wire

About Track Persia

Track Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.