Housing sector will take time to improve

The housing sector will get better only when the state of the economy and purchasing power of homebuyers improves, a Tehran-based analyst said.

Positive impact of Sunday’s implementation of the nuclear agreement between Iran and the six world powers, known as Joint Comprehensive Plan of Action — on the national economy will not emerge any time soon, Mahmoud Jamsaz told Fars News Agency.

He noted that the gradual release of the “not-too-impressive frozen assets” of the country which is estimated at $100 billion, would not ease the burden of the credit crunch on the government or ease recession across all sectors.

“Only $6 billion of the assets to be released belongs to the government and the rest is money of the Central Bank of Iran,” he said, adding that lower oil prices fueled by economic factors and the political tensions with Saudi Arabia have added to the imbroglio.

Jamsaz expected the housing sector to be the last industry to benefit from the sanctions relief announced late on Saturday. “Any positive development in the market is subject to improvement in the purchasing power of homebuyers that eventually determines the demand for housing units.”

He regretted that financial instruments such as Sokuk or participatory bonds are unpopular in Iran and called for concerted efforts to attract foreign investment. He further highlighted the importance of a safe and stable business environment which could encourage foreigners to invest in Iran.

Iran’s housing market is suffering from a long-standing recession despite the government’s stopgap measures, including raising the mortgage ceiling.

By Financial Tribune

Source Article from http://theiranproject.com/blog/2016/01/19/housing-sector-will-take-time-to-improve/

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