Title: A Financial Shortfall: Regulatory Scrutiny Intensifies Over Bank Lending for Housing
Article:
A Pledged Amount Withheld
A significant financial commitment to Iran’s National Housing Movement remains unfulfilled, according to an official report from the country’s Court of Audit. The report confirms that over the past four years, the banking network was legally obligated to allocate 2,221 thousand billion tomans in housing production finance. However, a substantial portion of this, 1,620 thousand billion tomans, has not been delivered, creating a funding gap that is slowing the pace of housing construction and impacting market dynamics.
The law mandates that the National Tax Administration collect 20 percent of this unmet commitment—equivalent to 324 thousand billion tomans—from the non-compliant banks and credit institutions. The Court of Audit has emphasized the immediate implementation of this measure, warning that decisive legal action will follow after the statutory deadline passes.
Diverted Funds and Market Distortion
The core issue, as highlighted by the report, is the alleged diversion of significant banking resources away from productive housing loans. Instead of fueling construction and supporting tenants, funds have been channeled into non-productive activities, including property acquisition and investment in parallel markets. This diversion is identified as a key factor deepening the financing gap for housing projects.
Further amplifying these concerns, Hossam Aghabayee, former head of the Real Estate Union, pointed to a clear legal infringement. In an interview with Mehr News Agency, he stressed that banking laws explicitly prohibit financial institutions from direct involvement in construction, property trading, and general commercial brokerage.
“Unfortunately, many banks in the country, both private and public, have entered the realm of brokerage in the housing and property sector, contrary to the explicit text of the law,” Aghabayee stated. He described this as a clear violation of the nation’s financial and banking regulations and called for serious intervention by supervisory bodies.
Calls for Supervisory Intervention
Aghabayee elaborated that some banks have formally established construction holding companies whose primary business is the production, purchase, and sale of property. He argued that this direct involvement distorts the market, as these banks, leveraging their financial backing, often buy properties at above-standard prices and sell their own units at rates exceeding local averages.
“This behavior not only violates banking law but also plays an effective role in increasing the price of housing and land,” he noted. “Banks have effectively become one of the main factors in housing speculation and inflation.”
The former official also addressed the reluctance of banks to provide approved housing loans to the public, attributing it to a preference for short-term, high-yield investments in areas like home appliances and automobiles. He emphasized that this approach constitutes a clear violation of the country’s macro-economic policies and central bank regulations, ultimately hindering the goal of facilitating homeownership for the public.