The purpose of this plan is selling residential units so that some part of this cost should be paid cash and some other by installment. It seems that the government agrees with it because of severe recession in this market. It is supposed to be implemented by Maskan Bank as an intermediary between mass producers and people. Yet, there are some key issues in this respect that should be considered before implementing it.

Housing is one of the fundamental challenges in the economic atmosphere in Iran. It devotes more than 30 percent of households’ costs to itself. Currently, more than 25 percent of Iranian families live in rental houses. With the 11th government, adopting fiscal contractionary policies, and not supporting Mehr housing, the housing market was experiencing a cardiac arrest.

Because of expansionary policies of the last government, it changed to an attractive market for investors. Major part of liquidity devoted to this market. Since the inflation rate was high in the previous government, expectations of this market have increased and it was suspended by the new government. During 25 months ago, most mass producers did not decrease house cost with reducing trend of inflation rate and they affected demand by not supplying their houses with appropriate cost. An unprecedented recession happened as a result in housing market.

It seems that this project cannot affect so much on housing market by itself in such condition. According to the mass producers, this project has monthly 2 million Tomans installment at least and ordinary households are not able to provide it. On the other hand, if the purpose of this project is providing house for average and upper classes of the society, most of them do not need such facilities.

It seems that if the government and Central Bank are responsible for part of this project, the situation will be better. Unfortunately, the government considered less to housing sector in anti-recession policies while housing market can boom more than 400 economic sectors undoubtedly. For example, if the government supported housing sector instead of automobile-makers, people’s satisfaction would increase and positive evolution would occur.

Source: Hamshahri Newspaper

Date : December 5, 2015