45% Decrease in Construction in Iran

According to the latest report from the Statistical Center of Iran regarding the issuance of building permits by municipalities in Iran, which pertains to the autumn of 2014, construction and building production in Iran has significantly decreased. Based on the results of this statistical report published on Wednesday, May 20, 2015, during the last autumn, Iranian municipalities issued 22,753 building permits, which represents a decrease of about 24% compared to the summer of 2014. This figure shows a decrease of nearly 45.3% compared to the number of building permits issued by municipalities in Iranian cities in the autumn of the previous year, 2013. These statistics confirm the continuation of the recession in the construction sector in Iran, which does not seem favorable for Iranian economic policymakers who are trying to move the Iranian economy towards recovery. According to this statistical report, in the last autumn, it was predicted that 65,104 residential units would be constructed from the total permits issued by Iranian municipalities. This forecast represents a decrease of 49.6% compared to the summer of 2014 and a decline of 54.9% compared to the same period in the previous year, autumn 2013. In autumn 2014, the Tehran municipality issued 1,907 building permits, which shows a decrease of about 18.5% compared to the previous summer. This figure experienced a decline of 56.9% compared to the same season of the previous year, autumn 2013. Based on the number of building permits issued by the Tehran municipality in autumn 2014, it was predicted that over 14,881 residential units would be constructed, which represents a decline of about 33.4% compared to the summer of 2014 and a decrease of about 66.4% compared to the same season of the previous year, autumn 2013. The housing sector in Iran has been in decline for several years, and the report from the Statistical Center of Iran indicates that the recession is not only on the demand side for purchasing but also in the supply and production of housing. The eleventh government and the Central Bank have implemented measures to restore vitality to this market, and among them, last Tuesday, the Money and Credit Council agreed to increase the ceiling for housing loans to stimulate the demand side of housing and increase the purchasing power of applicants to revive this market. According to this decision, first-time homebuyers in Tehran can receive loans of up to 80 million tomans with a one-year deposit. This ceiling was set at 60 million tomans for cities with populations over 200,000 and 40 million tomans for other urban areas in Iran. The interest rate for loans granted from the 'First Housing Savings Fund' account is set at 14%, and the repayment period for these loans is considered to be a maximum of 12 years. In the same session, the Money and Credit Council broke the monopoly of the Housing Bank in granting housing purchase loans, allowing all banks in Iran to engage in the field of housing loan provision. Housing purchase loans without deposit are also set at 60 million tomans in Tehran, 50 million tomans in cities with populations over 200,000, and 40 million tomans in other urban areas.