Snow arrived covering my out-of-town neighbourhood. The development to the left are the ongoing, still unfinished Mayor's offices
flickr View my photo journal
"What is it; house prices double every five or so years?", I put it, plucking a guestimate from nowhere in particular, "no, not at all", my friend's father – a property developer – corrected me. I expected him to maybe add another year, but it was quite the opposite; "no, house prices double every two and a half years". With my jaw still hanging some place below my neck I listened to him explain of how land prices increase at such a rate that development is given up on, leaving the major cities filled with concrete skeletons gridding the skyline.
My five year guestimate was certain to be off if only I'd remembered a family member purchasing a small spot of land in the north of Iran that long ago, at what would be $5000, and it currently being valued at nearly $400,000. This land, like the neglected patches around the major cities, has simply been left untouched; and why not; why have the headache and expense when you are earning while sitting still.
Not too recently I decided to look for a place to rent that would be closer to the office and the Tehran night-life. Initially I had problems with wanting to cohabit with a male friend; two young lads rang alarm bells with landlords. The next problem was having to front a refundable deposit of roughly ten months rent in advance, of which not I nor my friend had saving to hand. And it's this situation that baffles me daily: inflation is at such a rate that the money in my hands, or even the bank (if I was to use one here - which I don't) is currently depreciating at such a rate that it's frustrating if not futile saving for those big ticket items.
An odd, yet equally unfeasible alternative for us could have been to give a large sum of money to a landlord upfront. With this, our deposit of roughly $30,000 within a one year period would have adjusted (through inflation and bank interest) so much that upon getting this exact figure back from the landlord our rent would have materialised. If that same landlord were to invest it in land in the north of Iran then my five year residency could have gotten them a $2.5m asset to play with.
My friend and I gave up on the house hunt and continued living in the out-of-town apartment gifted by my family. The monthly rental amounts we were looking at never ventured below the national minimum wage (per month), meaning that to rent in what is wider-central Tehran, one must be of a healthy threshold. Although I met this threshold comfortably it didn't justify the exchange in commuting and would have paradoxically decreased the means to enjoy the Tehran night-life.
my savings may never keep up with the adjustment and I should claim the value while it correlates with my blood loss
With these big ticket items I am often castigated by my grandmother for not looking to invest in a house or being a, "real adult", and getting a car – apparently the money I drain away in coffee shops will bring this to reality. As she keeps pointing out, I do get a relatively healthy income putting me in the top 0.5% of earners here, yet when I thinking about saving money (which is made easier by my not currently paying rent), I can't help but wonder if I'd be wasting my time; that I'd be better off spending it fast. By that I mean that my savings may never keep up with the adjustment and I should claim the value while it correlates with my blood loss.
If I was to use a bank, I could accumulate the money there at what I think is around 18% APR, but this would probably still not keep up with the cost-of-being-alive and certainly not with the current climate in the property market. With this move I might then also be able to ask the bank for a loan, which I hear would be hard to arrange and not likely to be enough to get a footing. As for a full mortgage; they are pretty much unheard of here in Iran.
I was quoted in an Indian economics journal recently about this inability to keep up, yet was cut off without qualifiers such as joining the capitalist tramplings, using banks or using my family. The tramplings I think about a lot, by which I could buy and sell land - yet at the cost of any moral sensibility. The banks give me the same unease and the family is an altogether different unease. It's hard to avoid getting drawn in though; the longer I don't join in the tramplings the harder it will be for me - but I can't help but feel I would become part of the wider problem if I do.
everybody has two jobs - it's funny and it's true. That second job is the difference between being alive and living
For those slow or unable to indulge the tramplings there's always the blood loss. There is a funny comment I often hear in Iran; that everybody has two jobs, and that they work harder on the second - it's funny and it's true. That second job is the difference, the difference between being alive and living. It is increasingly more common to hear talk of all the above while sat in taxis around Tehran; the government bear the brunt of the frustration for which harsh words get shouted back at the car radios. Often I hear both inside and outside of the country that the president, Ahmadinejad is responsible for all the developing financial issues; I couldn't say either way, but I rather think he's an easy target and people maybe neglect external pressures and the country full-on embrace of neo-liberalism among other incidental matters.
The Iranian new year is coming and with it the usual price adjusting period where within a single week one can observe a national inflation hike. My healthy wage should increase also during this period but I figure it will only keep up with the post new year adjusted inflation, meaning that as the year creeps forward I'll lose more blood for my Rial and I'll still not consider buying a house or even a car. You'll more likely find me regularly draining it away in coffee shops, attempting to at least appreciate its value while discussing how bad this could all turn out.
Labels: Ahmadinejad, daily life, economy, family, houses, Iran, money, Tehran