A report published Saturday on HIBNA, the official news website of Bank Maskan, shows that the bank doled out 56,000 loans worth 24.56 trillion rials ($209.04 million) to applicants during the fifth month of the current Iranian year that ended on Aug. 22.
The number of loans remained virtually unchanged compared with the similar period of last year, but their value increased by 19%.
“A majority of allocated credits during the second month of this year’s summer comprised home purchase loans with a focus on financing homeownership for first-time homeowners and newly-wed couples,” Bank Maskan wrote.
During this period, according to Financial Tribune, 12.87 trillion rials ($109.55 million) worth of home purchase loans were doled out to 2,645 applicants. On the other hand, about 2.73 trillion rials ($23.23 million) worth of facilities were handed out for the construction of 2,645 residential units across all urban areas. Home renovation loans amounted to 2.3 trillion rials ($19.58 million).
This is while Tehran–the capital that represents one-third to half of all home deals across Iran–has witnessed a sharp decline in the number of home sales coupled with surging prices during May 22-Aug. 22.
Preliminary data for the sixth month of the current year ending on Sept. 22 also indicate that the negative trend has continued, fueling speculations that the housing sector may fall victim to another period of recession after it exited a five-year recession just nine months ago.
On Saturday, Hesam Oqbaei, the deputy head of the Association of Realtors, said most real-estate agents say the housing market is heavily stagnant at present and will most likely continue to be for the next few months.
“A decrease in the purchasing power of applicants, a massive increase in home prices and the exit of speculators from the housing market has caused the market to go into recession [during the fifth and sixth months of the current year],” he told Fars News website.
Preliminary figures for the sixth month signal a year-on-year drop of 45% in the number of residential real-estate deals in Tehran.
Oqbaei called the massive 50-60% home price jumps of recent months “unprecedented” and said the drop in the number of home sales is likely to exacerbate in the second half of the year.
“We can’t expect prices to drop because the number of deals has dropped. Only stability in the foreign currency and gold markets, currently still in turmoil due to the reimposition of US sanctions, can balance the housing market,” he said.
On Saturday, Mostafa Qoli Khosravi, the head of the Association of Realtors, also ruled out any expectations of a decline in home prices.
“What commodity has become cheaper in the country after experiencing a price jump that could make us hopeful of a decline in home prices?” he said.
The official confirmed that the number of house sales will only continue to fall during the second half of the year, but stressed that this still does not equate an all-out housing recession because urban areas other than Tehran are bucking the trend.
Khosravi cited figures without pointing to the source, saying 664,934 home sales were registered across Iran from the start of the previous fiscal year on March 21 toward the end of the first half of last year on Sept. 22, 2017, whereas 693,073 deals were registered from the start of the current fiscal year on March 21 toward the end of the first half of the current year on Sept. 22.
“The numbers actually indicate an increase in the number of sales across the country,” he said, while pointing out that sales in Tehran have sharply declined.