Bank Maskan Funded 1m Homes in 2 Years

EghtesadOnline: Bank Maskan, the agent bank of Iran’s housing sector, has released its two-year performance report, which indicates that it funded about one million homes in the fiscal 2016-17 and 2017-18.

News ID: ۷۸۳۱۹۹

10 July 2018

According to the report published on HIBNA, the official news website of the lender, the facilities included participation loans aimed at assisting the construction and purchase of residential units, as well as loans for renovating and completing housing construction.

In the fiscal 2016-17, the bank allocated 539,520 counts of loans whereas that number for the following year stood at 518,022 loans, a majority of which were aimed at helping purchase residential units.

In the previous year, home purchase loans handed out by Bank Maskan for savings accounts and bonds numbered 134,257 counts, which reached 184,328 during the following year to mark a 37% increase, Financial Tribune reported.

According to the report, the main driver behind this growth was the fact that a new wave of applicants with Housing Savings Account had their contracts come to maturity. The account requires applicants to make a deposit and wait a year to become eligible for twice that amount in loans at low interest rates.

As a result, the housing sector made its long-awaited exit from recession at the beginning of 2017-18, which factored into higher demand for home loans.

“In spite of this, estimates show that the volume of home purchase loans will once again increase” in 2018-19, Bank Maskan said.

According to the bank’s report published on Sunday, a total of 122,945 participation loans for the construction of residential units were handed out to applicants, a major portion of which were allocated in the form of facilities that do not require making a deposit.

“In the current [Iranian] year [started March 21], new loans are allocated again and their priority is which construction units conform to the dominant trend of demand [that is, apartments with small and medium floor areas with cheap to medium prices),” the report said.

During the fiscal 2016-17, a total of 97,149 loans for renovation and completion of residential units were handed out to applicants. This number rose to 96,103 loans in the following year to register a 6% increase.

At present, renovation loans are capped at 200 million rials ($4,705). Applicants need to first purchase housing bonds issued by Bank Maskan.

Based on the report, the lender predicts that “the number of loans to be allocated to applicants will increase” during the current fiscal year (2018-19).

On Sunday, Maskan Investment Group, the parent company of Bank Maskan, also underwent a change at the highest levels, as outgoing CEO Mohammad Reza Amini was replaced by Rouzbeh Zoheiri after two years.

During his farewell ceremony, Amini reviewed his performance at the group in the two years of his tenure. He said his main focus was in line with the macro policies of the government and the Ministry of Roads and Urban Development concerning projects that would yield results in the mid-term and those aimed at revitalizing distressed urban areas.

“From among the about 30 projects that were defined for implementation in the past two years, not even one commercial and luxury project was defined, except for special cases,” he said.

Amini pointed out that 10 trillion rials ($232.95 million) worth of “dormant projects” were finalized, which problem would prevent the group from undertaking major projects, if it were not resolved.

“The crisis facing companies [affiliated to MIG] has been resolved, but this policy needs to continue under the new management as well,” he said.