Industries Ministry Eager to End Housing Recession

EghtesadOnline: The government has been holding talks with banks to help pull the housing sector out of recession, since “stagnation in the housing sector is not acceptable, not even in the short run”, said the minister of industries, mining and trade.

News ID: ۷۳۵۸۴۱

14 August 2016

“Housing and construction industries are of higher importance compared with other sectors. Every year 4,000-5,000 new industrial units are created, which require direct attention to this key sector,” Tasnim News Agency also quoted Mohammad Reza Nematzadeh as saying during the opening ceremony of Housing Industry Exhibition on Friday in Tehran.
“We need to come up with plans to promote the housing market. As the main driver of the construction industry, the housing sector would help create more jobs and boost the country’s economic growth.”
The real-estate market has been grappling with recession since November 2013 and several government stimulus plans to move the sector has not so far resulted in a full recovery.
The minister also called for using reinforced concrete frames in buildings instead of steel frames.
“Using reinforced concrete is more prevalent across the world. Besides, the country is trying to increase the volume of steel export.”
Nematzadeh noted that two exhibitions on housing and construction industries have been planned in the next Iranian year (starting March 21), according to Financial Tribune.
“We want to hold exhibitions close to Imam Khomeini International Airport, since the current site is not spacious enough for industries to exhibit their products,” he said.

Akhoundi’s Prediction
In a separate development on Friday, Minister of Roads and Urban Development Abbas Akhoundi said home prices would not surge in Tehran.
“Estimates show that Tehran has currently 300,000 vacant apartments, which is sufficient for the supply side of the market,” he told state radio.
He added that his ministry has been focusing on empowering the demand side of the market.
“More than 60,000 people have applied for Housing Savings Accounts and more than 10 trillion rials have been allocated to homebuyers.”
As part of the mortgage scheme, Bank Maskan provides buyers in Tehran with 800 million rials ($25,800) while those in urban areas other than Tehran can qualify for 600 million rials. Those in towns with a population of less than 200,000 can receive 400 million rials.
“Statistics for the first four months of the fiscal year (ending  July 20), indicates a year-on-year growth of 91% in total home loans paid to the applicants,” he said.
“This also shows that the housing sector is escaping the prolonged recession, without having a negative impact on the rate of inflation.”
According to the Central Bank of Iran, the rate of inflation has dropped to less than 10% at present, after three decades.
Noting that MRUD has plans for empowering low-income families, Akhoundi said, “Our plans have ground to a halt, since most of the government’s resources have been devoured by Mehr Housing Project.”
According to the minister, the housing project–initiated by the former government–has recorded a 93% progress at present.