Financial Tribune- Bank Maskan, the agent bank of the housing sector and the country’s main mortgage lender, announced a whopping year-on-year increase in the value of mortgages in the first three quarters of the year that ended on December 21.
During the first nine months of the current fiscal year (March 20-December 21), Bank Maskan handed out 39.3 trillion rials ($984.7 million) worth of housing loans to applicants, marking an 81% rise compared to the 21.7 trillion rials ($542.5) of the corresponding period last year, the bank announced on its website.
During the same period, 93,995 homes were purchased through Bank Maskan’s mortgages which, compared to the first three quarters of last year, shows a 26% hike.
The bank considers a number of government policies and schemes in the housing sector to be responsible for the rise in mortgages. The measures include broadening the scope and reach of Maskan’s savings accounts and reinforcing buildings from 7 to 15 years.
The bank also refers to changes in mortgages pertaining to the Housing Savings Account as a defining factor in the increased volume of loans.
The scheme, which was devised to promote home ownership for first-time buyers, received a boost in late August when President Hassan Rouhani announced that “lending rates pertaining to the scheme, which were recently fixed at 11%, have been cut to 8% for homes purchased in distressed urban areas and 9.5% for non-distressed urban areas”.
That is while lending rates for the scheme, which require applicants to make an initial deposit and wait for a year to become eligible for the mortgage, stood at 14% at the beginning of the current fiscal year (in March) and was subsequently lowered to 13% and 11% before being further lowered to single digits.
Other policy changes in the housing sector contributing to increased supply of mortgages include easing home ownership for married couples, which is a new feature allowing couples to apply for two loans to buy or build a single house.