Capital Locked in Housing Market

EghtesadOnline: Recession in recent years, especially the one afflicting the construction market of Tehran and other provinces at present, is to blame on the absence of buyers for most of the units real-estate developers have already built or plan to build.

News ID: ۷۵۲۰۳۳

28 November 2022

Real-estate development follows two trajectories; the government-sponsored National Housing Movement (aiming to build one million housing units per year) and private sector initiatives that have always been the backbone of the market for meeting housing demand.

Iraj Rahbar, the head of Tehran Province Mass Builders Association, prefaced his article for the Persian economic daily Donya-e-Eqtesad with this note. A translation of the text follows:

In state-sponsored housing projects, the government, banks and applicants together provide land, financial resources and loans. But in private sector’s projects, the entire construction process and financing is carried out by the investor or builder. Therefore, the key prerequisite is for the builder to have the money to start the project and to ensure a return on investment when the project is completed.