Analyze and Ranking the Factors of Mortgage Market and Bonds for Increasing Affordability of Urban Households to Housing; Case Study: City of Urmia

Providing housing finance is one of the main components of housing sector’s strategy and also one of the most main items of the housing economy. In Urmia like other cities، deteriorating housing prices on one hand and households’ low- income in contact with house prices in other hand، has considered housing affordability of the citizens. This paper first analyses and then prioritizes the mortgage market and mutual funds، the affecting factors on increasing urban households’ housing affordability. Methodology of Research: This is an applied research that applies a descriptive- analytical approach to analyze and rank two factors of the mutual funds and mortgage market on increasing urban households’ housing affordability by using SWOT model. Data collection was done in two stages; inner (strength and weakness) and outer (opportunities and threats) were identified and selected in the first stage based on interviews with experts in finance، banking professionals، experts of urban planning. Then the representative sample including experts was identified to evaluate four factors in mortgages and bond certificates on urban households’ affordability. Using questionnaires and evaluating the representative samples by Likert 1 to 5 the strength، weakness، opportunities and threats were identified. Then the matrix of four factors was evaluated and ranked the factors that have been conducted and the conclusion is based on available data. The reasons of Challenges and problems in the housing sector at macro level (country)، especially for low- income groups in urban areas can be found in the following cases in Iran: The low per capita real income in all income groups، low- income deciles’ relatively below the poverty line living، spending more than 50 percent of their income for housing by low- income groups، lack of housing in many low- income classes، lack of welfare facilities and risky housing in low- income groups، Low cost of land and housing prices in the area outside the city limits which causes informal settlements، lack of compliance between programs and low- income household’s conditions، no tendency to new financial instruments to develop credit stock market and the banks investment bonds and certificates of deposit and the secondary mortgage market، increasing liquidity risk for housing loans (loans with deposits)، low- income families going out of the housing finance system، severe impact of exogenous factors such as the rising cost of land and housing in the housing finance system، unequal distribution of income among different groups of income، loss of affordable housing، the uneven distribution of urban income، the rapid growth of rental rates، the imbalance between supply and current housing demand and lack of low- income groups’ tend to sit flat. The results in micro level show that the following factors are more effective in housing affordability of Urmia households between internal and external factors: Facilities without depositing، low-income households’ entrance to housing market، low amount of facilities in proportion to the price of residential units، daily increasing interval between facilities and housing prices، possibility of increasing the repayment period، availability for all income groups، unaffordability of low- income households to bank repayments، raising affordability of low- income households، the lack of participation of all banks in housing، providing a secondary mortgage market and…. Finally this paper shows that the mortgage market and mutual funds act an effective role on housing affordability of the urban households.