Bank Rate Cuts to Assist Housing Boom

Lower bank interest rates, which cause more capital to flow toward other sectors including the housing sector, will prove instrumental in triggering a boom in the sector, a board member of Tehran Association of Realtors said.

“The flow of capital from the banks toward production, especially in the housing sector that can itself help generate 300 other jobs, will surely cause a boom in the sector and help the economy,” Mostafa Qoli Khosravi was also quoted as saying by Fars News Agency in a meeting to assess housing recession in metropolises, especially Tehran.

Interest rates paid on deposits were decreased to 15% and 10% for long- and short-term deposits respectively by way of a directive issued by the Central Bank of Iran in early September.   

Khosravi then referred to much criticism conveyed by officials about vacant house–whose number amounts to about 2.5 million nationwide–and said they are not a loss as they will remain for next generations.

“The production of new residential units must increase to the level where it does not lag behind demand,” he said, adding that the empty homes must become marketable.

The official noted that “recession has left the housing market” and recovery has followed with 97,000 home sales registered in the country just last month, which indicate a rise.

He took a jab at Minister of Roads and Urban Development Abbas Akhoundi, saying that even though he has repeatedly promised to implement the Social Housing Scheme in the past few years, it has not yet materialized.

The Social Housing Scheme is a subcategory of the government’s Comprehensive Housing Plan that incorporates programs to provide low-income groups and those covered by state charities like Imam Khomeini Relief Committee and State Welfare Organization with affordable housing.

It aims to provide more than 100,000 residential units for low-income groups each year.

In conclusion, Khosravi pledged his support to startups and mobile applications emerging in the housing sector.

“We cannot fight technology, therefore we must embrace it and use it to our benefit because we at the Association of Realtors believe that these housing applications will prove to be in the interest of the people,” he said.