Low Share of People in Banking Facilities; Housing Loans Become Government Project Allocations

A Tehran-based newspaper has reported on the status of loan disbursement by banks, stating that the banking network is effectively serving the 'National Housing Loan Obligations.' The newspaper 'Donya-e-Eqtesad' in its issue today, Tuesday, March 21, has discussed that the available resources in the housing loan sector in banks are being allocated, either by directive or other means, with priority given to 'funding government housing construction projects.' The report emphasizes that there is a noticeable 'disparity between the purchasing power of housing loans and house prices' both in Tehran and other cities across the country. The author of this report stresses that policymakers believe 'housing loans have only lost their effectiveness in Tehran and are still impactful in many other cities.' According to this newspaper, this government assumption is completely incorrect because the inflation rate of housing across the country has equaled that of Tehran, and currently, housing loans are ineffective not only in Tehran but in all urban areas of Iran for first-time homebuyers. The report also mentions that the share of the housing sector from total banking facilities in the country is currently 6.5%, whereas in 2017, this figure was 8% and over 25% in the 2000s. One of the main reasons for the lack of housing loans to the public is the obligation of banks to provide loans for 'national housing projects.' Meanwhile, the government news agency 'Tasnim' also reported yesterday, March 20, on the government's 'ineffective' housing policies, stating that due to the rise in the price of housing loan bonds, with a 960 million Toman housing loan from Bank Maskan, after deducting the cost of purchasing bonds, one can only buy 4 square meters of a house in the first district of Tehran. The latest report from the Iranian Statistical Center indicates that housing prices in Tehran have reached their highest historical level during the recent inflationary wave, with the average price of housing in the capital rising to 80 million and 600 thousand Toman in January of this year. This inflation has ultimately led to the phenomena of 'bad housing' and 'homelessness' in the country. Following these events, the rental market has also been disrupted. The prevailing conditions in the housing market have become such that this summer, the Research Center of the Parliament reported that until the early 2010s, the first to third income deciles were effectively deprived of access to adequate housing due to their inability to pay bank installments; currently, these three deciles are 'absolutely' unable to secure the housing they need, while the fourth and fifth deciles and even parts of the sixth decile are 'relatively' unable to provide adequate housing for their residence. Ibrahim Raisi, during his electoral campaign and after taking office, promised to build one million houses per year, yet more than two years into his administration, there has been no achievement in this regard. The housing market has come to a standstill; buying and selling houses have stopped. The poor living conditions of the people; the newspaper Shargh states: 'We are not far from receiving loans to buy bananas, flour, and milk.' Acknowledgment from a government-supporting media outlet: The promise to build one million houses per year has not been fulfilled. A loan for not becoming a homeowner; buying 8.5 square meters of a house with a 960 million Toman loan. The consequences of housing inflation; a decrease in 'marriage' and a drop in birth rates. Marriage in the style of the Islamic Republic; starting a joint life with installments of 26 million Toman. Workers are on the verge of being removed from the 'National Housing Plan.'