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Minister of Housing seeks partnerships with private companies to revitalise housing sector

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Real estate summit Cityscape Egypt launched

On the sidelines of the conference, a cooperation protocol between SODIC, Tameer Mortgage Company and Al Oula was signed (Photo courtesy of SODIC)

On the sidelines of the conference, a cooperation protocol between SODIC, Tameer Mortgage Company and Al Oula was signed
(Photo courtesy of SODIC)

With the aim of attracting real estate investments, Minister of Housing, Utilities and Urban Communities Mostafa Madbouly said Monday that the government will consider partnerships with private investment companies to implement development projects in the housing sector.

The minister made this statement during the real estate summit Cityscape Egypt, launched Monday, where representatives from leading property investment and financial companies gathered to discuss opportunities in the sector.

Real estate companies signed, in the sidelines of the conference, separate projects agreements in the high-level housing sector. Among the projects approved was the cooperation protocol between SODIC, Tameer Mortgage Company, and Al Oula Real Estate Development Holding Company.

According to SODIC, the protocol entailed the financing of up to 80% of built residential, commercial, and retail units, where Al Oula would provide clients with loans to finance their properties.

“The mortgage loan would cover remaining payments on clients’ units including delivery payments, with the option of lending the cost of finishing core and shell units as well,” SODIC said in an official statement. “Payment terms could be extended up to ten years.”

During the summit, Madbouly called on businessmen to adopt “socially responsible” projects that can achieve development in needy areas such as poor villages.

Madbouly said the unavailability of water and sanitation stations in 88% of Egypt’s villages represents a major challenge facing the housing sector.

“Addressing this challenge will require between EGP 120bn and EGP 140bn in investments,” Madbouly said. The implementation process is expected to take between 15 and 20 years.

Madbouly said the Armed Forces-sponsored project to offer low-income youth 1m residential units in cooperation with the Emirati Arabtec Construction Company will activate the housing sector, however, he noted that the details of the project are still under study.

Around 65% of the real estate market demand comes from low-income citizens, Madbouly said.

The real estate market demand is still huge despite the unstable condition of the country, said Ahmed Badrawy, the managing director of SODIC Egypt, during the summit.

Compared to 2010, the market demand increased by 40%, according to chairman of Arabia Group Tarek Shoukry.

Shoukry expected more increase in market demand, which he said represents a good opportunity for citizens to buy units with reasonable prices.

Over the past three years the real estate market supply had decreased by 50%, Shoukry said.

Meanwhile, in the last five months, property demand has been increasing, said Emad AlMasodi, executive director of leading real estate website Agar.com.

Listing the challenges facing the sector, Shoukry said investments are hindered by heavy bureaucracy. There is a deficit in needed manpower and workers, he said.

The New Urban Communities Authority (NUCA) will conclude amending the real estate regulations’ draft within two months, the minister said.

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