According to the Iran Economist, having a shelter for a large part of the country’s population has become a dream. According to the 1995 census, the share of rental property in urban households was about 31 percent, but given the jump in housing prices in 1997 and 1998, it can be estimated that this rate is probably now above 40 percent. Last year, Mahmoudzadeh, the deputy minister of roads and urban development, announced that there were about 8.5 million tenant households in the country, largely because they did not have enough income to buy housing.
For this reason, the 13th government announced its most important promise to build 4 million houses in 4 years, in order to compensate part of the backwardness and inefficiency of the previous government in the field of housing construction, to ease the situation and remove the burden from the people.
According to the latest statistics, more than 5 million people have welcomed the National Housing Movement, which is generally waiting for the refinement of applicants. Also, so far, less than 200,000 people have been introduced to Bank Amel in the form of 11,967 projects to pay for housing facilities.
A small share of housing from the facility
Implementation of one of the largest large projects in the country has its obstacles. Since in the bank-based economy of Iran, more than 80% of financing goes through the banking network, so the most important challenge in this area is the issue of financing.
Over the past 10 years, banks’ payment facilities to the housing sector have risen from 17.5 percent to about 5 percent in 1400, meaning that the share of facilities in this sector has steadily declined.
According to the latest report of the Central Bank on the purposes of payment facilities in the economic sectors in the 12 months of 1400, the share of the housing sector of 2960 thousand billion tomans of payment facilities of banks has been only 6%.
“Almost more than 40 percent of the facilities in the United States are housing and real estate,” Ali Naderishahi, an expert in the field of money and banking, told IBNA. “This figure is about 50 percent for Switzerland and about 20 percent for Germany.”
“Another ratio that is used in this area is the ratio of mortgage facilities to GDP,” he added. This ratio is 104% in the Netherlands, 93% in Denmark, 62% in the United States, 80% in the United Kingdom and 15% in Iran. “These statistics show that mortgage facilities make up a high percentage of facilities in developed countries.”
Legal support for financing
The Islamic Consultative Assembly, in order to build construction and increase the share of housing in banking facilities, passed the Housing Production and Supply Law, which according to Article 4 of this law requires banks and non-bank credit institutions to pay at least 20% of the banking system each year Allocate the approved profit of the Monetary and Credit Council to the housing sector, so that in the first year of law implementation, facilities for the units subject to this law are not less than 360 thousand billion Tomans, and for future years, the minimum facilities will increase by increasing the percentage mentioned above Annual inflation will increase.
Of course, the Islamic Consultative Assembly did not limit the issue of housing construction facilities to the Housing Production and Supply Law, and in the 1400 budget law, it obliged the banking system to pay 360,000 billion tomans in housing construction facilities, which, of course, did not materialize.
Dealing with violators
Another important action of the parliament was to anticipate legal action against the offending banks. Accordingly, it was approved that “If a bank or non-bank credit institution refuses to pay the facility quota set by the Central Bank, the Central Bank is obliged to increase the legal deposit of that bank or non-bank credit institution in proportion to the unfulfilled obligation. “Through other banks and non-bank credit institutions, to pay for housing construction facilities.”
The will of governments
Despite the legal support, unfortunately, in the previous government, no measures were taken commensurate with the importance of the housing issue. In addition, during the period of Abbas Akhundi’s presence in the Ministry of Roads and Urban Development in the first 5 years of the government, there was basically no will to build government housing, and after that, no effective action change was observed.
For example, despite the fact that according to the budget law of 1400 central banks, it had time until the end of April to determine the quota of each bank to pay for housing facilities, after 7 months from the legal time, it provided the quota of each bank, which is a sign of reluctance. Had to enforce the law.
Although the law on the allocation of housing facilities was not implemented in the previous government, the people became hopeful with the coming to power of the 13th government and the promise of housing construction as the main slogan of the government. For example, with the extensive follow-up of the Ministry of Roads and Urban Development in the thirteenth government, finally on November 3, 1400, two months after the official inauguration of the government, the Central Bank announced the facilities subject to the budget law of 1400 to other banks.
Cooperation between the Central Bank and the Ministry of Roads and Urban Development
Undoubtedly, the will of the new government and the measures taken to date can be considered a sign of fulfillment of the government’s promise. For example, on April 20 this year, in a rare move, the Minister of Roads and Urban Development was invited to a regular meeting of the Governor of the Central Bank with the CEOs of banks to discuss its financing in the presence of the housing construction trustee in the country.
Ali Salehabadi; Emphasizing on using the capacities of the National Housing Fund, the Governor of the Central Bank stated at the meeting: Takes”.
Although in previous periods, banks resisted the provision of long-term facilities to the housing sector, but it seems that in the new period of the Central Bank, with a special focus on housing, it is possible to implement the law of allocating 20% of bank facilities to this sector. He was hopeful.
The difference between the National Housing Movement and Mehr Housing
One of the ambiguities about directing bank credit to production is concern about its inflationary consequences; Especially since there is Mehr housing experience in this regard. Some argue that banks, while retaining the power to lend to other sectors, may seek to finance the law by overdrafting central bank resources, in which case the inflationary consequences will be predictable.
But Rostam Ghasemi; In response to this concern, the Minister of Roads and Urban Development believes: “Housing was inflationary, but the National Housing Movement is not inflationary; Because, like Mehr Housing, the credit line of the Central Bank has not been considered for its implementation. The central bank allocated a line of credit for the construction of Mehr housing, and inflation erupted when these resources entered the market. “The source of funding for the National Movement plan is bank facilities, which in the past were allocated to other issues, but now, according to a parliamentary resolution and the Housing Production Leap Law, 20% of the facilities must go to the housing sector.”
Anti-inflationary effects of housing construction facilities
Contrary to popular belief that housing facilities are inflationary, expert opinions are based on the view that housing facilities themselves can be a factor in reducing inflation.
Ali Naderishahi; “Directing facilities to housing construction, since it provides an asset to the economy, can stabilize inflation based on the relationship between the amount of money and the stability of other conditions,” the money and banking expert told IBNA.
On the other hand, due to the special nature of housing as a safe asset for investing in inflationary conditions, the increase in prices and expected returns of this sector, leads to the movement of part of the available liquidity towards it and also creates an induced inflation. “So if the expected inflation of the housing sector is controlled, the vicious cycle of inflation can be controlled, which is one of the benefits of providing facilities to this sector.”
It seems that pursuing the revival of the share of housing construction facilities in the total facilities of the banking system is a sign of hope for a change in the government’s approach in the field of housing, which has given people hope for becoming homeowners; An issue that had become a dream following the events of the 1990s.