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Iranian Financial Institutions to not Increase Home Loans

Home Loans in Iran

As the inflation rate is growing on daily basis in Iran, Iranian banks and financial institutions are not intended to increase home loans. Currently, Iranian governmental banks offer cheap loans to citizens for buying new homes and apartments, but the spending power of these loans are too low.

Ali Hosseinpour, an Iranian economist, said on Sunday that local banks should increase home loans and mortgages. “Unfortunately, the spending power of dedicated loans is low and people cannot buy new properties by using these kinds of loans. I suggest Central Bank of Iran to increase home loans according to country’s inflation rate.”

Hosseinpour went on to say that home loans in Iran have lost nearly 95% of their real values in recent years. “Several years ago, buying a new apartment and home was an easier task. Nowadays, people should pay much more to buy properties even in downtown. The next government of Iran has to concentrate on addressing this issue.”

Currently, the interest rates of homeowner loans in Iran are between seven to ten percent. The government of Mahmoud Ahmadinejad had previously promised to provide homes to people who are unable to buy properties. However, the government failed to control domestic housing market.

At the being time, the average price of homes in Iran are 3 to 5 times more than the average price in world’s most expensive cities such as Berlin, Tokyo and New York. It is worth mentioning that foreigners may own or lease property in Iran if the property is for commercial or industrial use, or for a personal residence.

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