Bank Maskan, the agent bank of Iran’s housing sector, declared in its latest report that the value of loans allocated in the last fiscal year that ended on March 19, 2020, increased by 17.5% compared with the year before.
According to the report published on its official news portal Hibna, the bank handed out 636,723 counts of a variety of loans worth 301,360 billion rials ($1.86 billion).
These loans include those for home construction, which do not require down payments or initial deposits, in addition to loans for the purchase and renovation of homes.
In the last fiscal year (March 2019-20), Bank Maskan’s branches throughout the country doled out 40,801 loans worth 49,070 billion rials ($303.83 million) for boosting the construction of residential units, registering a 39% increase in number and a 58% growth in value compared with the year before.
Decline in Tehran Home Sales
Last year, the number of constructions declined below 20% in Tehran compared with the preceding year, whereas home purchases fell by more than 30% in Tehran and up to 50% in other cities, the report said.
Bank Maskan’s lending facilities have played a significant role in preventing even deeper recession in real-estate development.
The Planning and Housing Economy Office of the Ministry of Roads and Urban Development's latest report shows Tehran’s home prices kept on rising despite the decline in the number of deals in the month compared with the preceding month.
The number of home sales in Tehran reached 10,242 during Feb. 20-March 19, indicating a decline of 24.4% compared with the month before.
The average price of each square meter of a residential unit in Tehran stood at 155.68 million rials ($964) last month, registering an 8.6% increase month-on-month.
Among Tehran’s 22 districts, District 1 registered the highest average home price of 332.17 million rials ($2,056) per square meter, followed by District 3 with 271.63 million rials ($1,681) per square meter and District 2 with 233.65 million rials ($1,446) per square meter.
District 18 offered the capital city’s cheapest homes with average per-square meter prices standing at 74.79 million rials ($463), followed by District 20 with 75 million rials ($464) per square meter and District 17 with 79.6 million rials ($492) per square meter.
The total value of home deals during the month under review stood at 147,500 billion rials ($913 million), posting a decline of 8% compared with a month before.
Mostafa Qoli-Khosravi, the head of Tehran Realtors Association, says home sales in the capital city dropped by 40% in the month ending March 19, following the outbreak of coronavirus.
“Home deals, including sales and rents, fell to 6,979 compared with 11,703 in the preceding month [Jan. 21-Feb. 19] due to the virus. The decline in people’s visit to real-estate agencies and the rise in the number of homes put up for sale and rent have led to a change in homeowners’ preferences. Some of them are now willing to sell their properties at prices below the market value,” he was quoted as saying by IRNA.
Variety of Loans
The Hibna report also shows the number of loans granted for home purchases totaled 228,949 worth 96,740 billion rials ($599 million) last year, indicating a 31% decrease in number year-on-year.
In the case of home renovation facilities, Bank Maskan provided loans worth 46,340 billion rials (about $287 million) to 189,174 applicants during this period, registering a YOY growth of 16% and 64% in number and value respectively.
Interest-free loans for applicants seeking to get married, in addition to loans aimed at completing home construction, were allocated to 40,183 applicants in the last fiscal year. The total value of these loans stood at 12,560 billion rials ($77.7 million).
Housing Savings Account
Bank Maskan’s Housing Savings Account constitutes 12% of the total resources of Bank Maskan.
HSA is the bank’s primary and most successful initiative created nearly four years ago that requires applicants to make down payments and wait for a year to become eligible for the cheapest home loans in the country.
Target applicants mostly constitute first-time prospective homebuyers.
The scheme requires applicants to make an initial deposit and wait out the one-year maturity period for credits, plus the depositor’s down-payment.
When the scheme was first launched, the interest rate of loans was set at 14%. In February 2017, after a directive by the Money and Credit Council, they were reduced to 9.5% in general cases and 8% for those who wanted to buy a home in rundown neighborhoods of the cities.
HSA is said to be a self-sustaining fund since all the resources it absorbs are redirected to boost the financial strength of Bank Maskan for it to support prospective homebuyers through cheap facilities.
