Unlicensed builders will no longer be able to receive construction loans by 2021. One of the problems in the Iranian housing market over the past year has been the reduction of available houses resulting from the decline in real estate development.
This decline has been caused due to the stagnation of the real estate market from 2013 to 2017. Unlicensed developers are those who own real estate which they plan to demolish and renovate.
Banks focusing on housing loans plan on rectifying the situation by offering construction loans to licensed real estate developers and builders.
The majority of the demand for housing is from middle-class citizens seeking to purchase small to medium sized apartments in middle-class neighborhoods in large cities. Thus, loans and financing will only be granted to developers which seek to develop projects satisfying this demand.
“A large portion of Iran’s energy resources belonging to the people, are spent to produce construction materials which also lead to environmental pollution”, says Abolqasem Anaraki, CEO of Bank Maskan. Moreover, the developed real estate lack quality and are only serviceable for 10 to 15 years, after which they must be demolished. Throughout the world, residential buildings have a lifetime of nearly 100 years.
“This situation needs to be remedied as the buildings developed in Iran lack any form of standards and are occasionally dangerous. Therefore, loans will be granted to medium sized apartments which are in line with market demands. This year, priority is given to apartments below 85 square-meter in Tehran and below 100 square-meter in other cities”, adds Mr Anaraki.
The real estate sector in Iran is run by the private sector and the government has the least amount of interference in this sector.
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