Tehran home sales at three-year high
According to the latest report of the Central Bank of Iran, nearly 18,000 apartments were sold in the month ending August 22, which has been unprecedented since May 2014.
The number of residential deals during the month indicates an annualized growth of 23.7% while the figure marks an increase of 6.1% compared to the previous month. This is while in the past three years, the average number of home sales in Tehran had not exceeded 13,000 per month.
The Iranian government has been endeavoring to end the beleaguered sector's recession that began in 2012. The allocation of cheap loans to first-time homebuyers and incentives for builders, especially in distressed areas, was among government measures undertaken for promoting the market.
Speaking to Financial Tribune, Iraj Rahbar, the head of the Association of Tehran Builders, said aside from seasonal demand that influenced the market last month, the allocation of home loans has also positively impacted the volume of sales.
"One of the main reasons behind the housing recession has been people's low purchasing power, which was partially resolved by the allocation of cheap housing loans," he said.
Housing Savings Account, launched in June 2015 for the first time, aims to provide first- time homebuyers with loans at an interest rate of 14%, which was later reduced to 9.5% (8% in distressed urban areas) in February 2017.
The scheme requires applicants to make an initial deposit and wait for a year to become eligible for the loan.
Rahbar added that if the allocation of loans does not face any hurdles due to its agent bank's capital shortage, the scheme will definitely help the market get back on its feet. ■