The flexibility of real estate companies to confront the novel coronavirus (COVID-19) pandemic enabled the sector to gradually overcome the crisis, according to Tarek Shoukry, Head of Real Estate Development Chamber at the Federation of Egyptian Industries (FEI).
Those companies also initiated new mechanisms to overcome the crisis which helped the sector get back on its feet and return to its previous activity.
Shoukry noted that Egypt’s property market has also experienced some changes that are related to the nature of the market.
He said that mortgage financing is the only mechanism that can be relied upon to bridge the gap between purchasing power and unit prices. This particularly takes into account the high cost of implementation, and the continued stability of customers’ purchasing power.
Additionally, there should be a greater facilitating and accelerating of procedures for obtaining mortgage funds, which will contribute to spreading the mortgages culture in the Egyptian real estate market.
He added that one of the main real estate developer demands regarding expansion in the mortgage finance system is to be applied on off-plan projects. This would take place by gradually providing mortgages to off-plan units, and through instalments until the unit’s delivery.
“The COVID-19 pandemic has affected the entire world and all economic sectors, including real estate, although the local real estate market dealt flexibly with that crisis, which led to multiple changes, namely an expansion of real estate companies in marketing their projects based on technology and e-marketing,” Shoukry said. “Moreover, the pandemic provided real estate developers with new experiences to deal with any crisis in the market.”
Regarding the chamber’s efforts in supporting real estate companies during the peak of the pandemic, Shoukry added. “There were many mechanisms implemented by the Real Estate Development Chamber, in cooperation with developers, to confront the effects of this epidemic and maintain sales movement in the market since its outbreak in Egypt until now.”
He said that, with the beginning of the crisis in March, companies launched a “March Sale” which included promotional offers. Despite the shaky consumer confidence and uncertainty, the offers led to a strong movement in the real estate market during that period.
“The chamber also submitted a request to the Ministry of Housing, Utilities and Urban Communities to grant real estate companies an additional three months to implement their projects without delay fines,” Shoukry said. “This was approved, and we submitted a request to grant another three months to developers to absorb the full effects of the crisis.”
Since June and Egypt’s gradual post-COVID-19 reopening, the market has in parallel undergone a gradual evolution. During the current period, the real estate market is experiencing a performance that is closer to its normal levels.
Shoukry said that this is expected to gradually improve with the purchase of deferred and accumulated demand in the market during the crisis period.
He revealed that the Real Estate Development Chamber has prioritised a number of issues for the coming period, namely mortgage finance and facilitating its procedures. These have been put at the forefront in order to keep pace with market changes and changing customer needs and purchasing power.
Additionally, there has been a push for the government to issue the Federation for Real Estate Developers law. The federation will be the legal entity responsible for regulating local real estate market, as well as studying any problems between developers and clients during projects.
There have recently been several complaints submitted to the Egyptian Consumer Protection Agency (CPA) by clients, due to delays in delivering their units.
“Our goal is to find a balanced relationship with all parties [government, developers, and clients] and preserve the rights of all,” Shoukry said. “We would like to emphasise that the CPA works in accordance with the law, which is what we agree upon.”
He added, “We all work to implement laws and control work system in real estate market. However, we need for dialogue between all parties of real estate development system without making decisions based on the vision from a single point of view.”
As a result, there must be a balanced discussion between the agency, developers, and clients, and an independent technical entity. This would discuss complaints and to facilitate a clear vision and action plan for the coming period.
Accordingly, the Real Estate Development Chamber plans to hold a meeting with the CPA to discuss the customers’ complaints regarding the dispute. This will then be presented to the parties involved to develop a plan of action and a clear vision that preserves the rights of all parties.
Shoukry said that the recent Central Bank of Egypt (CBE) decision to slash the interest rate by 0.5% is in the Egyptian economy’s favour. It is expected to motivate investors to cooperate with the banking sector to push the wheel of investment and growth.
In addition, the decision maintains the continued development of real estate projects, particularly as there are a large number of real estate developers wishing to obtain loans. The finance will help these developers either to complete current projects, or invest in new expansion opportunities.
In a different context, Shoukry announced his intention to run as a candidate for the upcoming parliamentary elections.
He said, “Everyone who has experience must work to make best use of that experience in serving his country as a duty towards his homeland. I decided to benefit from my accumulated experience in housing and investment, by running for the House of Representatives, to serve as a voice representing real estate sector in the parliament to approve legislation needed by the sector and its oversight.”