Tehran Housing Loan Securities See Significant Price Surge
A recent uptick in the value of various securities within the capital market has notably impacted the pricing of Housing Loan Priority Certificates. These certificates, essential for many Iranians seeking to purchase a home, have experienced a marked increase in value on the Iran Fara Bourse.
Market Performance Highlights
During Tuesday’s trading session, the certificate for the year 1404, traded under the symbol “Tase 1404,” saw its price discovered at 134,500 Tomans per certificate. The trading day concluded with approximately 431,000 certificates changing hands, representing a total value of over 58.8 billion Tomans.
This positive trend continued into Wednesday, with the price of these housing loan certificates climbing a further 2.6% to reach 137,100 Tomans, even as the overall market index experienced fluctuations.
Understanding the Role of Housing Loan Certificates
In recent years, obtaining a housing loan through the purchase of these certificates has become the most common method for home financing, particularly for first-time home buyers. While several banks are formally involved, the process has effectively consolidated, with Bank Maskan being the primary institution currently processing and paying out these housing loans.
The mechanism requires applicants to purchase the necessary number of Priority Certificates from the secondary market on the Fara Bourse. This system was established to streamline access to financing, as it allows citizens to obtain loans without the prerequisite of maintaining a long-term privileged savings account with the bank, directly addressing the need for a more expedited process.
Financial Implications for Home Buyers
The current price surge directly affects the cost of securing a loan. For instance, a couple in Tehran eligible for a maximum combined loan of 1.28 billion Tomans must purchase 2,560 certificates. At the current price of 137,100 Tomans per certificate, the upfront cost to secure this loan amounts to over 350 million Tomans. This represents a significant initial investment, equating to more than one-third of the total loan value before the funds are even disbursed.
Historical Context and Potential Solutions
This is not the first time certificate prices have reached these levels. In late Khordad 1403, prices for the “Tase 1402” certificate similarly approached 130,000 Tomans before receding. The current increase is attributed to a combination of reduced supply from certificate holders and the broader bullish trend in the stock market influencing all securities.
Historically, solutions have been implemented to alleviate such financial pressure on applicants. In the winter of 1399, amidst a similar price hike, Bank Maskan introduced a “loan without certificates” scheme for 50% of the loan value. This initiative, which lasted until the spring of 1400, significantly reduced the upfront financial burden on households. Under that scheme, half the loan required certificate purchase while the other half did not, with a marginally different interest rate applied to each portion. The successful precedent of such a measure highlights a potential pathway for future policy to support citizens in achieving homeownership.