EghtesadOnline: The total volume of loans allocated to Iran's housing and construction sector by banks and credit institutions during the first five months of the current fiscal year that ended on Aug. 22 jumped by 35%, according to data newly released by the Central Bank of Iran.
Figures published on the monetary regulator's website show that the loans doled out to the sector during the period totaled 207.71 trillion rials ($1.26 billion). During the corresponding period of last year, the sector received 153 trillion rials ($928.56 million) in loans.
The increase in support for the ailing housing sector comes, as volatilities in the currency market have for months created instability in other markets, including the housing market.
The government intends to mobilize finances in the housing sector to boost people's dwindling purchasing power and prevent the falling number of home deals from crashing, Financial Tribune reported.
A majority of housing loans are allocated by Bank Maskan, the state-run agent bank of the housing sector, that takes its lending directions from the Ministry of Roads and Urban Development.
"One of the goals of the bank is to financially support households to purchase a house, the realization of which goal can be accelerated if policymakers provide the necessary support," the bank wrote on its official news website HIBNA in a review of CBI statistics.
"Another part of the operations of Bank Maskan is to support producers in the housing and construction sector and this support can help create jobs and economic growth, in addition to improving the climate of doing business in the country," the bank added.
In addition to the notable rise in the volume of bank loans allocated to the housing and construction sector, another point that stands out is how much more significant that rise has been when compared to other types of bank loans.
According to CBI data, the total volume of facilities extended to various sectors of the economy by banks and credit institutions during the first five months of the current year was equal to about 2.40 quadrillion rials ($14.56 billion). The figure was 325 trillion rials ($1.97 billion) or 15.6% higher than the corresponding period of last year.
So the rise in the total volume of loans allocated to the housing and construction sector in the aforesaid period was more than twice the rise in the volume of facilities extended to all economic sectors.
CBI also reports the number of loans received by each sector of the economy. According to its data, the housing and construction sector received 444,095 loans this year, whereas it received 350,285 loans in the corresponding period of last year. So the number of loans handed out to applicants in the sector have also registered a year-on-year increase of 27%.
The CBI report further outlines the purpose for which loans have been allocated to each sector. In the housing and construction sector, a total of 106.89 trillion rials ($648.71 million) or 51.5% of the loans were handed out for purchasing residential units.
Working capital loans came next with a 17.7% share equaling about 36.84 trillion rials ($223.58 million) and were followed by renovation loans amounting to 24.79 trillion rials ($150.45 million) or 11.9% of all loans allocated to the sector. Other categories each had a share of under 10%.
All currency exchanges are calculated based on the Sept. 28 rate of 164,771 rials to the US dollar registered in the official Sana system of the Central Bank of Iran.