When times were good, customers at Arash’s tea house in southern Tehran would smoke two hookahs a day, each flavoured water pipe costing them 80,000 rials, or just under $2. But such was the impact of the reimposition of US sanctions on the Iranian economy after President Donald Trump abandoned the 2015 nuclear deal, Arash was lucky if customers smoked two a week.
Things got so bad he could no longer afford the monthly rent of 30m rials ($714) to keep running the ghahveh khaneh – an old style cafe popular with working-class men. This month, he moved his business to Parand, a dusty satellite town some 35km south-west of Teh ran , hopeful that life would be cheaper and easier. “I guess no one leaves Tehran to live or work here unless they feel miserable like me,” said Arash, as he sets colourful glass water pipes on a table in the down-at-heel neighbourhood he now lives.
Official figures are hard to come by, but a recent parliamentary report suggested that people are being pushed out of larger cities by the rising cost of living. The “rise in cost of sales and rents in big cities, especially Tehran, has increased movement to the satellite towns … which could lead to social crises”, the report said. At least 1m people moved out of big cities last year because of economic hardship, said Ali Kord, a member of parliament.
Over the past year, Iran ‘s economy has been hit hard by Tehran’s inability to export oil. The rial has fallen in value against the dollar by about 60 per cent since last year, the most recent data shows inflation of 42.7 per cent and the IMF has estimated the economy will shrink 6 per cent this year. Inflation has also hit the housing sector – house prices rose 82.2 percent in the three months to the end of June onthe previous year. Rents rose 29.1 per cent in the same period, according to Iran’s statistical centre.