HSA Growth Beats Expectations

EghtesadOnline: More than 480,000 people have opened Bank Maskan’s Housing Savings Account that offers Iran’s cheapest home loans since its inception about three years ago, the bank’s chief executive said.

News ID: ۷۸۳۶۷۹

15 August 2018

“Some 360,000 accounts should have been opened in this scheme as per the predictions, but we’re ahead by 120,000,” Abolqasem Rahimi Anaraki also told Mehr News website on Sunday.

“Such accounts [launched in June 2015] until Aug. 6 exceeded 480,000 with the number of active deposits surpassing 353,000,” the CEO of the agent bank of Iran’s housing sector added.

HSA requires applicants, mostly first-time homebuyers, to make down payments, the volume of which differs based on the city the applicant lives in and whether they are single or married. The applicant is required to wait for a year to become eligible for double that amount in cheap loans with interest rates of 8% and 6% for non-distressed and distressed urban areas respectively, Financial Tribune reported.

According to Rahimi, the total value of HSA deposits has exceeded 70 trillion rials ($1.66 billion).

“More than 62,400 residential units have used facilities doled out from the account, bringing the total volume of loans employed by these units to 46.70 trillion rials ($1.11 billion).

About 20,620 residential units bought on HSA loans belonged to married couples with a total of 21.21 trillion rials ($505 million).

The Bank Maskan chief admitted that HSA has faced shortage of facilities, adding that under such circumstances, the bank quickly taps into “other resources”, without elaborating further.

Rahimi said the trouble is that the potential time of a possible fund shortage is unclear due to the high volume of liquidity circulating in the country, which can be redirected toward the market, but it could cause upheaval in other markets as it has happened in recent months.

The Bank Maskan chief was probably referring to the resources of the National Development Fund of Iran. Officials, including Roads and Urban Development Minister Abbas Akhoundi, have in recent months announced that it may be possible to transfer $1 billion from NDFI resources to the HSA scheme to maintain the supply of facilities in the face of increasing public demand.

In a separate talk with ILNA on Saturday, Rahimi talked of offering incentive packages to builders. He said the ceiling of Bank Maskan loans to builders who employ traditional methods has decreased whereas those using modern methods will be eligible to receive the highest cap of loans.

“On the other hand, we will reduce interest rates for professional constructors by 1%,” meaning that they will be able to repay loans with a 17% rate to save on some expenses.

The Bank Maskan chief reiterated a previous scheme to incentivize, through special facilities, builders to initiate a presale of their under construction units.

The bank aims to connect these builders with prospective clients to reduce costs and help meet real consumer demand.

According to the official, the number of homes that have been able to receive Bank Maskan loans has jumped by 60% year-on-year during the first quarter of the current Iranian year to June 21. The increase was felt more in terms of loan value that has risen by 70%.

“If our resources are procured, we plan to offer loans for up to 700,000 residential units,” Rahimi said, pointing out that the bank financed about 540,000 units last year.