Determining the Housing Affordability of Households Using Extended Linear Expenditure system (case study: Iran urban areas in 1393)

To assess support housing policies, there is a need to determine the purchasing power of households. The housing affordability of each household is not only a function of household income, but is inversely related to household spending. In this paper, by using the extended linear expenditure system (ELES) and data revenue and expenditure of 18885 Iranian urban households in 2014, the average cost of a typical household has been set. By using the average cost of a typical household, the average income of households in each income decile, the average price per square meter of residential units and economic policies related to bank loans in the housing sector, the housing affordability in different income deciles is measured.
Research findings show that in seven low-income deciles, the average minimum consumption expenditure is more than the average income. To cover the minimum expenses, these deciles have income deficit. In other words, these deciles have no surplus income to pay monthly installments for the purchase of housing. Surplus earnings of upper 3 deciles of income is not very noticeable and represents the country's low per capita income. This static research, shows how the reduce in the loan interest rate or increase the repayment period or reduce housing prices, the housing affordability of households increases and for households, the possibility of buying more area of housing provided