Economy, Business And Markets

Gov’t Policy Not Housing-Savvy

Gov’t Policy Not Housing-SavvyGov’t Policy Not Housing-Savvy

A  University of Tehran economist says because government moves, both in the past and those anticipated for the future, to prop up the sagging real estate market have so far failed to deliver, the government lacks sufficient knowledge about the housing sector.

“Enhancing the housing sector demands expertise and simply increasing mortgage ceilings (in the future) will not solve the problem,” Fars News Agency quoted Beitollah Sattarian as saying last week.

“If the government continues on this path the loan ceiling will have to be raised continually year after year without any tangible impact on the market” the academic warned.

He called on the government to form a special team to help address housing industry woes, regretting that the economic structure of governments over eight decades had not changed. He did not elaborate.

The housing industry is inseparable from other industries. The recession has affected all layers of the housing sector including affiliated industries, which has made a bad situation worse.” Sattarian opined that a further decline in government revenues would “intensify the housing recession” and urged the government to develop plans for wean the housing sector off the fast declining oil revenues, which were at 11-year low on Saturday.

He added that although 95% of the construction sector is managed by the private sector “it still relies on the government.” The analyst was implying to the long-held though controversial notion in Iran that whenever government revenues improve different sectors, including the key housing market, are in better shape.