The dream of housing prosperity with a loan of 200 million tomans
The Minister of Roads and Urban Development announced that his ministry has proposed to increase housing loans to 200 million tomans. However, the activists of the housing sector, who are still involved in the recession, following the jump in the exchange rate, witnessed two negative events: the flow of funds into the foreign exchange market and the growth of housing prices, which led to a decrease in the demand of this sector, and it seems that the facility will increase to 200 million tomans. It will not have much effect on the attractiveness of the housing market.
The sudden growth of housing prices from the second half of 2016 onwards has been accompanied by a decrease in demand; Because before that, the housing market was free of speculative demand and real applicants were present in it. After the price increase of 10 to 30 percent, which reached 40 percent in some areas, the housing facility gradually lost its effect; As far as the coverage limit of the highest payment facility in Tehran, which reaches the ceiling of 160 million tomans, it has reached about half of the average housing price. Based on this, the Ministry of Roads and Urban Development has proposed to increase the facility to 200 million Tomans to the Money and Credit Council.
Before the housing recession in 2011, the housing sector accounted for 33% of the country’s economy. This housing sector had a prior relationship with 78 economic sectors and a posterior relationship with 56 economic sectors with a diffusion coefficient of 1.2. That is, for each job, 1.2 indirect jobs have been created. Also, the share of housing and construction in the direct employment of the country was about 12% and the number of employees in this sector was 3.1 million people. This statistic shows the importance of the housing sector as a leading and job-creating sector; Employment that has been greatly reduced by the decline of construction.
According to statistics, the supply of housing has reached about one third of the demand. According to statistics, the housing production increased from 820,000 units in 1391 to 333,000 in 1395, which shows that the market is currently fed by 2.6 million vacant residential units, but the continuation of these conditions will lead to pressure on demand and rising prices. Apart from this, the impact of external sectors such as the currency and coin market can create turbulence in the housing market, as we saw this happen at the end of last year. The currency price grew by 31% in three months and reached 5090 Tomans. The average housing price in Tehran also increased by 26 percent during this period, which showed that land and housing owners do not want to lag behind the competing markets and maintain the value of their property.
But the housing price bubble does not benefit either of the supply and demand sides. Therefore, the best scenario for the housing market is to stop the growth of prices so that the applicants’ ability to gradually approach the prices through bank facilities; A scenario that seems more like a dream.
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This post is written by Arpex_yt