Iran’s housing sector is in a dire state, with prices skyrocketing and sales plummeting across the country, especially in metropolises. The government of President Hassan Rouhani and the parliament have several major initiatives in the works, but do they really stand a chance at turning the faltering sector around?

When President Donald Trump announced in May 2018 that the United States was withdrawing from Iran’s nuclear deal with world powers and unilaterally imposing harsh economic sanctions, a currency crisis developed in Iran that shot up inflation. The immense inflationary wave soon hit the housing sector, which had just exited its longest recession in recent history.

Since then, housing affordability has considerably declined across Iran, leading to lower home sales and a stagnant properties sector.

But the bustling capital Tehran, which has traditionally accounted for one-third to half of all home deals in Iran, is having it the worst. According to the latest report published by the Central Bank of Iran, the average price of each square meter of a home in Tehran reached 133 million rials ($3,166 at the official rate) during the third Iranian month that ended June 21, signaling a whopping 104.3% annual increase. Only about 6,000 homes were sold in Tehran in that month, indicating a 59.8% drop compared to the same month of the year before.