To avoid a shock in the real estate market, the Central Bank of Iran will not urge banks to provide mortgages worth 800 million rials ($29,000 at official exchange rate), CBI credit manager, Ali Asghar Mirmohammad-Sadeghi announced. In order for the real estate market to exit stagnation a real estate deposit fund should be established and 800-million-rial housing loans should be provided, minister of roads and urban development Abbas Akhoundi earlier suggested.
As banking resources are limited, such a proposal is not feasible, Fars news agency quoted CBI’s credit manager as saying. The CBI has already taken several technical steps to stimulate growth in the housing market. Namely, Bank Maskan’s mortgage fund was increased to 350 million rials ($12,700). Applicants also have the option of applying for an additional loan worth 100 million rials ($3.6 thousand) for home repairs. Of all the loans provided by the banking system, 25 percent already go to housing. The amount “cannot be increased any further,” Sadeghi asserted.