Maskan Investment Group, the investment arm of the parent company that owns the agent bank of the Iranian housing sector, has outlined its funding priorities, indicating an increase in finances for middle-income people.
“Based on a strategic plan approved by the Bank Maskan Finance Group and analyzing the futures market, recent changes in the housing market and the reduction of people’s purchasing power, the Maskan Investment Group has organized a three-year plan with the aim of improving and adapting the portfolio of subsidiaries with the prevailing needs of households,” the group said in a statements published on the official news outlet of Bank Maskan.
Based on the three-year plan, by the end of the fiscal 2019-20, the share of housing projects for middle-income and medium-to-high income people and commercial projects from the basket of the subsidiary companies of BMF Group has been set respectively at 75%, 16% and 9%.
Maskan Investment Group is one of the 14 active subsidiary companies of the BMF Group, which is also the parent company of Bank Maskan. The investment arm, founded in 1990, is one of the largest real-estate development companies in Iran and its capital was bumped to 5.5 trillion rials ($144.7 million) last year.
According to its website, the company was involved in the construction of over 67,000 residential units since its inception and also engaged in the establishment of water pipelines, roads and highways.
In line with the macro policies of the administration in the housing sector, which aim to support low- and middle-income people who are largely unable to afford homes even with loans, the investment group wishes to funnel three-fourth of its funds into supporting them.
The BMF Group subsidiary has also devised plans for defining new projects and completing the ongoing ones in the next three years.
For the current fiscal year (ending in March 2018), the company aims to finish the construction on 295,948 square meters of residential units, kick-start 272,000 square meters worth of new projects and build 2,959 residential units.
As part of the targeted goals, 390,000 square meters of the projects underway will be finished, 550,000 square meters of new projects will be started and 4,900 residential units will be constructed, meaning that the investment group aims to add 100,000 square meters and 1,000 units each year.
Low- and Middle-Income Support Schemes
According to the head of the Housing Economy Department at the Ministry of Roads and Urban Development outlines, the administration’s Comprehensive Housing Plan is an overarching scheme with long- and short-term objectives to support low- and middle-income households.
“The Social Housing scheme, which aims to build a total of 100,000 residential units a year, is a component of the plan,” Ali Chegini added.
The goal of the scheme is to provide low-income groups and those covered by state charities like the Imam Khomeini Relief Committee and State Welfare Organization of Iran with affordable housing and cover as much as 70% of the rent for vulnerable groups.
The Housing Savings Account is the next government scheme “which falls in the category of plans to provide housing for middle- and low-income households”.
Under the scheme, applicants make a deposit and wait for a year to become eligible for low-interest loans that are handed out at 8% interest rate for distressed urban areas, the lowest rate in the country.
Chegini referred to the transformation of Bank Maskan into a development bank as another important step in line with expanding the mortgage market.
Earlier this week, he had announced that the administration of President Hassan Rouhani has put the transformation of the agent bank of the housing sector on its agenda and the Central Bank of Iran is expected to devise policies and regulations for the development bank to be reviewed and approved by March 2018.
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