A country’s experience in exiting “recession like Iran property market” shows that the housing and construction sector even in excess supply can become a stimulus engine for other sectors and guarantees boom, if it exactly identifies the source of recession and exactly removes it.
The China government realizing that “not selling of large size and high cost homes” has caused a drop in buying transactions and declining of construction investments, has founded its economic programs’ priority on “making opportunity of housing recession in order to growing economy” and for this purpose, has implemented five fiscal flexible policies in order to boost applicants’ purchasing power and stimulate manufacturers. The most important policy is lowering the interest rates of house building and buying loans.
Simultaneously the purchasing loan power has increased from 70% house average cost to 80% for 1st-time homebuyers and from 50% to 60% for 2 nd-time homebuyers. Also the duration of loan pay off period has become 30 years to increase the effective demand community. China has one of the largest mortgage loans markets. China economic experts as a support of “starting of housing boom by government intervention” to continue the initial boom have declared: the excess units must be sold without raising their prices.