Economy, Business And Markets

Expert Reflects on Affordable Housing

Expert Reflects on Affordable Housing  Expert Reflects on Affordable Housing

A veteran builder has urged the government to focus its efforts on helping homebuyers and discourage rent-seeking in the property sector if it really intends to stimulate the stagnant housing market.

“The government has focused on raising the mortgage ceilings without considering how the people will be able to repay the loans. Low and middle-income brackets cannot afford 14% interest,” quoted Muhammad Edalatkhah as saying on Saturday.

“Government policy in the past (low cost land) were the main source of builders’ profits, not their construction activities,’’ he said without elaboration.

Construction in Tehran costs 10-20 million rials ($330-$662) per square meter, whereas homes are priced between 40-180 million rials ($1,325-$6,000) per meter, he said. Pointing to the prolonged recession in the real estate market, Edalatkhah noted, ‘’builders would sell houses for much higher prices had the not occurred.

The housing sector slipped into one its worst recessions in 2012 after enjoying a period of boom. Stimulus measures by the government in the last two years to lift the market have so far proved futile for a variety of reasons, not the least of which is the decline in purchasing power of the large majority and the greed of property developers.