Some people who are willing to settle down in countries like Cyprus, the United Arab Emirates and Malaysia and who find no customers for their properties are willing to swap them for real estate in those countries and such transactions are sometimes more beneficial to buyers. Some real estate agents have noted that if an Iranian national is planning to purchase real estate in Malaysia, new Malaysian regulations do not allow them to buy real estate worth less than 150 million tomans.

The minimum price for real estate in Malaysia was previously 75 million tomans, but the Malaysian government has noted that at a new price, foreign nationals will be able to buy suitable real estate. According to real estate agents, a residential unit with an area of 110 square meters and suitable facilities is worth about 150 million tomans half of which is paid in loan to buyers. Bank facilities carry a 5-percent interest rate. A simple calculation will show that the loan should be repaid in monthly installments equal to 500,000-700,000 tomans in every installment while that unit can be leased for about one million tomans per month. Therefore, a person buying such a residential unit can pay the installments and save the rest of the rent.

Agents say that some real estates in Malaysia are accompanied with permit to live in that country and buyers should not be concerned about this. Even if a property lacks conditions for residence of their owners, there are special companies which can take action and get residence permits for their owners.

Some real estate agents warn customers to be careful about economic conditions of countries where they are going to buy real estate because in some countries a price bubble exists in the housing sector and when that bubble explodes, the result is rapid fall in price of real estate and their capital will be in danger. This has been the case during the past two years when due to housing crisis in the United States, real estate prices took a nosedive.

According to this group of real estate dealers, gaining profit through swapping real estate in Iran with those in other countries is closely related to global economic climate and economic motivations of buyers.

That money should be paid in the following manner: about 30 million tomans is paid in advance. A month later, 15 million tomans is paid followed by another 15 million tomans three months later. Some 45 million tomans is paid 10 months later upon delivery of the residential unit. Two and a half years later, another 45 million tomans should be paid and that sum can be taken from banks in loans whose monthly installments do not exceed 1.5 million tomans.

In most instances, bank loans account for as much as 60 percent of price of a residential unit and those loans carry interest rates of, at least, 5 percent and, at most, 7 percent.

Among other ideal conditions in buying real estate in Cyprus is issuance of residence permit to live in the European part of Cyprus and two-year guarantee for renting the house, if asked by the customer.

Meanwhile, customers cannot own the land and they only own the superstructure as ownership of land cannot be transferred to foreigners in Armenia. In addition, no residence permit is issued to foreigners by the Armenian government. Therefore, if you bought an apartment in Armenia, you could only use it in your trips.

Real estate agents maintain that since the government is controlling real estate in countries like Malaysia and Cyprus and mass production is the norm, price of real estate in those countries is much lower than Armenia. Every square meter of apartment in Armenia is sold for 1.5-2 million tomans.

Real estate agents dealing in foreign properties maintain that Iranians, who plan to buy real estate in other countries through specialized companies, should first make sure about legal status of those companies because they might be misled.

Real estate agents also say that people can investigate authenticity of such companies through legal authorities.

You can buy a posh residential unit with an area of 110 sq. m. at a middle-class neighborhood in Malaysia for about 70 million tomans. Total price of that property is about 150 million tomans, but half that price is loaned to customers by the Malaysian government at low interest rates. Despite the fact that dealing in foreign properties is very common, many people who have lost their money in Dubai have learnt lessons about the outcome of making hefty investments without adequate information.

Pointing to current stagnation in housing market and parliamentarians’ viewpoint on it, Noura added that further deterioration of the stagnation will be a historical mistake.

Tabnak website quoted him as saying that reallocation of subsidies will first increase prices in various economic sectors.

“We must note that an increase in prices will be proportionate to an increase in price of energy carriers by the government. If price hike is sudden, the market will experience a price shock. Based on calculations, this will increase wages and price of construction materials by, at least, 30-40 percent. However, the final impact of that increase on price of land cannot be estimated. Land price will be more influenced by inflationary expectations. Inflationary expectations resulting from enforcement of subsidies reallocation law will be manifest in the land price and will not have a remarkable effect on downstream industries related to construction,” he added.

The MP noted, “If price hike is gradual (gradual shock), which is what the parliament wants, the final increase will stand at about 15 percent. Most analysts maintain that the increase will be 10-15 percent depending on price of which good will be first increased by the government. If the government started with gasoline or gas or other energy carriers, the price hike will be higher. Anyway, the final increase will stand between 10 percent and 15 percent. Of course, I think that this is an optimistic estimate and will come true only if global economic stagnation continues. However, if stagnation comes to an end and market developments increase the price of, for example, copper and steel, in that case we will have to deal with an external price shock too. Therefore, as long as stagnation is there, we must take steps to implement reallocation law. Otherwise, no government will be able to enforce it under other circumstances.

“We, at the parliament, believe that housing is faced with a difficult stagnation which will harm both the society and national economy and we complain about any measure which would further worsen that stagnation. Increasing stagnation in the housing sector will be a historical mistake. If we want to create jobs and see prosperity in economic activities, we must make plans to bring prosperity to the housing sector.

“Let’s not forget that prosperity is different from price hike. Economists maintain that if we intended to control prices in a given economic system through stagnation, an inflationary crisis would no doubt follow. Perhaps, we would be able to continue like that for four or five years, but we would then see that due to the wide gap between supply and demand, which is a result of low supply against high demand due to stagnation, a “price shock” has started.”

Noura said that conditions should not be so difficult as to dissuade mass builders who will not be willing to work due to high prices.

“Loans given by banks only benefit buyers and are no good to sellers because they are directly given to buyers. I believe that interest-free facilities are a good option and we support that option. More importantly, however, is how such facilities are handed out. We must strengthen infrastructures of construction work and also introduce the cultural factor. Most people do not trust mass builders and consider them profiteers. This cultural attitude should be corrected and mass builders should be appreciated for the service they provide to people and people should be made to understand this. All mass builders and entrepreneurs should be supported. I believe that one method to increase efficiency of bank facilities allocated by the government is to provide mass builders with credit facilities and cash. In return, we must tell them that if they finished the project in time, those facilities will be interest-free. Paying loans to people is a mistake.

Economists maintain that small amounts of money should be put together to make large sums to work with. This is what banks are doing. Now, if we give small amounts of money to people in loans, this will increase the cost of construction work and price of the resultant building. This is a mistake. However, if big money is given to mass builders and they spend it in large-scale projects, construction cost will decrease. This method has been tested and accepted in the world,” he added.

The MP noted that if interest-free facilities were given to mass builders and projects were delivered on-time to buyers who would have to pay the facilities back to banks, in that case, the cost of construction and cost price of buildings would fall and there would be no inflation as a result of the expansion of liquidity.