Hussein Raghfar, a prominent economist says it is necessary for the government to intervene in the market by regulating land prices for affordable housing and put an end to speculative activities because land price is a major component of housing construction costs, mainly in the metropolises.
He recalled that government support for the affordable housing is common throughout the world and commended the Rouhani administration’s efforts to raise mortgage ceilings to enable more people to own homes.
“Unfortunately, the housing bubble of the past has left its mark on home prices and buyers cannot afford them,” he was quoted as saying by the website of the Ministry of Roads and Urban Development.
According to the university instructor “Policy and decision makers should devise regulations for the property market that can attract more resources into the housing sector.”
Raghfar was in support of lower mortgage rates to boost the real estate market but said it would not be enough to pulling the market out of its long slumber.
Parallel markets like gold, gold coins and foreign currency are also often tempting as people seek safer havens, he noted, and called on the government to create the conditions wherein the housing sector becomes more attractive. Residential units should cost ten million rials ($331) per square meter on average to be affordable for low and middle income households, Raghfar said, adding that “Housing units measuring less than 90 square meters would be ideal for the market.”
