Economy, Domestic Economy

10m Housing Units Needed by 2022

10m Housing Units Needed by 2022
10m Housing Units Needed by 2022

Ten million housing units are required to be built by 2022, an official in the ministry of housing and urban development announced on Saturday.

Iran's young population representing the majority is confronted with a serious need for housing, and action is needed to meet the increasing demand of low-income groups.

The so-called Mehr housing scheme, launched by the ex-president in 2007- aimed to provide thousands of units to low-income families and cover a part of this shortage by construction of 2 million housing units in 5 years. But the project failed to meet its objectives. 

Housing prices are still very high and only a small group of people can afford to buy homes.

To support the growing demand, "the government did not increase the housing loan ceiling of 180 million rials in the past 8 years. However, house prices surged 6-fold in this period, proving that the loan ceiling does not correlate with housing prices. Furthermore, increasing the loan ceiling cannot considerably rise housing prices", Ali Chegini, managing director of the office for planning and economy (affiliated to the ministry of roads) said.

"Creating a housing fund in each bank can set the grounds for providing applicants with a wide range of loan services; including low-interest loans for subprime borrowers, loans for those who want to buy their first home, and loans for reconstruction of old structures," he said.

The housing sector creates 13 percent of the total number of jobs in the country. Therefore, it raises the gross domestic product (GDP) 2.7 percent by every one percent growth. 

So far, Bank Maskan has been the only provider of housing loans in Iran.