In a move to stimulate the sluggish housing market and increase homeownership, the Money and Credit Council - a major monetary decision making body - agreed to raise the ceiling of house construction loans.
According to the CBI website, each applicant in Tehran is eligible for up to 1 billion rials ($7,700) in home construction facilities. The ceiling for couples is 1.6 billion rials ($12,300) (800 million rials each).
As for cities with populations above 200,000 people, the one applicant can get 800 million rials and couples 120 billion rials (%9,231) (600 million rials each). In other urban areas, individual applicants will be eligible for 600 million rials and couples one billion rials.
The new measure seeks to support and encourage the construction of small and medium sized residential units. The loans with new ceilings only cover units with floor area of up to 100 square meters. In addition, banks can lend housing facilities in long-term installments to buyers of constructed houses. The repayment period for such loans can be extended up to 15 years for
Latest data published by the CBI last week indicates the price of each square meter of a residential unit in Tehran shot up 85% compared to last year. The skyrocketing housing prices coincide with sharp decline in the number of deals, which have fallen 49.2% annually.
The steep rise in home prices is mainly attributed to the unprecedented drop in the value of rial since last summer after the abandoned the historic Iran nuclear deal with the six world powers and imposed sanctions.
