800 million tomans loan for housing construction; From promise to implementation – Tejaratnews

According to Tejarat News, Mehrdad Bazarpash, the Minister of Roads and Urban Development, announced in a note on his Twitter page about the increase in the ceiling of housing facilities. In this regard, he wrote: “With the approval of the Money and Credit Council, the amount of industrial and knowledge-based housing construction facilities increased by 35 percent.”

As Tasnim reported, before this ceiling construction of housing facilities for 12 cities of Tehran, Isfahan, Shiraz, Mashhad, Tabriz, Karaj, Ahvaz, Bandar Abbas, Bushehr, Qom, Sari and Rasht for professional builders who also use modern technology. It was 600 million tomans per unit. Due to the 35% increase in the facility ceiling, the loan will increase to 810 million tomans for the 12 mentioned cities.

Accordingly, in the mentioned cities, 500 million tomans will be paid to professional builders who do not use modern construction technology, and 450 million tomans to other builders without construction deposit.

Also, recently, according to the Central Bank’s letter to the CEO of the country’s banks, the national housing movement loan limit was increased to 550 million tomans in all cities of the country. Previously, the ceiling of this facility was 450 million Tomans in Tehran, and in some areas, banks paid less than this ceiling.

Do banks have the necessary resources to increase the amount of the facility?

At the same time, the government has increased the payment ceiling for housing facilities during the last month, which seems that the banks do not have the necessary resources to implement these plans, and the source of funding for this increase in the facility ceiling has not been announced yet. If the banks turn to the central bank for borrowing, due to the financial incapacity of this institution, we will eventually see money printing and repeat the cycle of inflation.

On the other hand, due to the low profitability of mortgage loans, banks do not have much desire to participate in such approvals and prefer commercial projects.

The Director General of Housing Economics of the Ministry of Roads and Urban Development said in this regard that in the first year of the implementation of the law on the jump in housing production, 360 thousand billion tomans of the National Housing Movement facility and 548 thousand billion tomans were notified to the banks in the second year, but the banks have so far provided about 111 thousand billion tomans. Toman have signed a contract including facilities in the form of self-ownership, national housing movement, rural housing and housing deposit to applicants.

Also, statistics show that in the first year, 18% and in the second year, 17% of the legal obligations of the banks in paying the National Housing Movement facilities have been fulfilled. In total, the performance of the banking system in providing facilities to the national housing movement was 17.5%.

Therefore, with these descriptions, increasing the facility ceiling without providing financial infrastructure may be able to increase the amount of supply in the short term, but it will ultimately fuel inflation.

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