Bank Maskan, the main housing lender intends to raise funds from the bond market to be able to help a bigger number of first-time homebuyers.
According to IBENA, the news agency of the Monetary and Banking Research Institute, the lender has received permission from the Securities and Exchange Organization to issue Islamic bonds worth 10 trillion rials ($60 million).
Bonds will help boost the bank’s mandate. Bonds will mature in two years at 16%. Interest will be paid every three months.
The government has recently set its sights on the stock market to secure funding for the key housing sector. It also has plans to create Real Estate Investment Trusts (REIT) to help the housing sector. This was announced earlier in the week by Mohammad Ali Dehqan, a deputy economy minister.
Designed to pool the capital of investors, REITs makes it possible for individual investors to make a profit from real estate investment -- without having to buy, manage, or finance the properties themselves.
Many REITs are publicly traded on major securities exchanges and investors can buy and sell them like stocks.
Underscoring the role of REITs in funding housing projects, Dehqan referred to the government-backed National Housing Initiative and said such schemes can help attract public savings into the credit-thirsty housing sector.
Under the NHI scheme, the government has said it intends to build 400,000 affordable homes for first-time homebuyers, namely from the middleclass. This implies that the cost of an apartment offered by the NHI would not be much lower than the prices in the market that have gone through the roof.
Home prices, real estate and construction costs have jumped up several hundred percent in the past three decades making it almost impossible for the working class, especially the youth, to buy a decent apartment on their own.
In related news, Alireza Nasserpour, a deputy at the Iran Mercantile Exchange, spoke about a plan to issue Standard Parallel Salaf Contracts for pre-sale of housing units.
Standard Parallel Salaf is an Islamic contract similar to futures. It refers to sales in which payment is made in advance by the buyer. Full payment is made when the transaction is complete.
Within this framework, a constructing company can issue Salaf contracts to interested homebuyers. The builder is committed to deliver the home unit before the date of maturity mentioned in the contract.
