The Central Bank of Iran has issued a directive enabling builders to sell their apartments in Tehran in installments with Bank Maskan as guarantor.
The scheme, jointly prepared by Maskan, builders and the Ministry of Roads and Urban Development, is mostly aimed at helping builders sell their new units with big built-in areas. The bank will serve as an intermediary only guaranteeing the payment of the installments by homebuyers in return for a commission.
One of the challenges builders in Tehran face is that demand for big units -- with built-in areas of 150 square meters and above -- is very low. These apartments account for 30% of the newly-built units in Tehran but only make up for 6.7% of the total sales.
Builders have made the case that the payment period of installments will be short, maximum 2-3years. They will charge some interest which will be added to the net price. The down payment is expected to be not more than 50% of the total price of a house.
Large sums of the banks’ credit and builders’ liquidity is locked in such unsold apartments and the new scheme could help unfreeze such money. This can in turn increase banks’ lending power and help the middle classes become homeowners. It can also improve the purchasing power of buyers of small and medium apartments.
