Economy, Business And Markets

Real Estate Leasing Firms May Return

Real Estate Leasing Firms May ReturnReal Estate Leasing Firms May Return

The Central Bank of Iran is revising real estate leasing regulations, a move that could lift the ban on the sector which was banned by the previous administration, an official at the CBI said Monday.

“As soon as the revisions are finalized it will become law,” Mehr New Agency quoted Hamidreza Ghanizadeh, head of the CBI Office for Research and Regulations as saying on Saturday.

The new scheme, if approved, would allow leasing firms to offer loans covering up to 70% of home prices.

The loans will be offered at  21% and the repayment period could vary between 5-12 years.

 Ministry’s Position

This week a senior advisor to the Ministry of Roads and Urban Development said his ministry supports the reactivation of real estate leasing firms.

“Scrapping the real estate leasing sector was a mistake, and we urge the CBI to revoke its earlier decision on this issue,” Hussein Abdo Tabrizi said.

He said Abbas Akhundi, the minister of roads had pleaded with the CBI to allow lessors to enter the real estate market two years ago.

“However, a major constraint in home leasing contracts is the sky-high rates because the lessees would not be able to pay interest rates hovering near 30%,” he added.

The previous government banned the leasing companies on grounds that they had manipulated the key housing market.