Egypt halts sale of new city lands to individuals

Shaimaa Al-Aees
6 Min Read

Authorities for Egypt’s new cities have received a letter from the Ministry of Housing, Utilities and Urban Communities stating they are not allowed to sell land to individuals.

The letter was dated 12 February and issued during a meeting between President Abdel Fattah Al-Sisi and Prime Minister Mostafa Madbouly.

It also said that the sale process for land is limited to real estate developers and projects run by government agencies. This includes Madbouly’s directives to take the necessary measures to implement the mentioned assignments.

A source at the New Urban Communities Authority (NUCA), affiliated to the Ministry of Housing, Utilities and Urban Communities, revealed that lands allocated to individuals during the last period will be exempt from the new restrictions.

The source added that NUCA continues to offer small areas of land for various activities, including commercial and administrative properties. The decision was put into effect to organise the offering process for individuals, in light of lands bought by individuals being resold.

He further said, “It is possible that NUCA will re-offer lands to individuals again after a period of time, especially since the decision was made clear to postpone offering lands, and not to stop offering them.”

Hassan Abdel-Aziz, Chairperson of African Federation of Construction Contractors Associations (AFCAA), said that the decision to stop selling lands in new cities to individuals is an unwise decision. This is because it will raise price of land in those areas.

Abdel-Aziz noted that the state was selling lands to individuals at reasonable prices commensurate with all classes and categories of society, with those individuals bound by building laws and requirements.

However, should land only be sold to real estate developers, they will exaggerate these prices, whilst also offering plots of land for sale at overstated prices. 

This will mean that the price per square meter may exceed EGP 7,000, pricing them over the capabilities of middle-income and low-income people, because each real estate developer will set their own profit rates.

The government should reconsider the decision, because citizens have been reassured about buying from the state. This is due to plots of land being offered in accordance with the terms and contract, while there are some real estate developers who are not committed and deceive clients.

Moreover, the state must provide plots of lands and residential apartments for rich and poor people alike, each according to their capabilities.

Mohamed Albostany, President of the New Cairo and New Capital Developers Association and Vice President of the Real Estate Investment Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), said that the decision is correct and serves all parties in Egypt’s construction industry.

It also serves to guarantee the rights of the state, developers, and citizens, whilst ensuring that the client will be able to receive their unit on time, without any obstacles.

Albostany added that, contrary to the fears of some that prices will increase, he made it clear that this decision will lead to the stabilisation of prices. This is due to developers buying lands directly from the state, instead of individuals who delay selling land in order to double its price.

However, he demanded that the state, in the event that the decision will be temporary, put controls on personnel and building requirements to reduce randomness.

Ahmed Selim, CEO of New Generation Group, believes that NUCA’s decision to stop offering any lands to individuals through the lottery system is a serious step for the reconstruction of local real estate market.

This is especially after the decline in land sales in the recent period as a result of the low demand from individuals looking to buy plots of land. The change in preferences has been brought on by the customer tendency to buy units within compounds.

It has resulted in companies having difficulty selling to individuals, especially as they do not have any financing solutions for the construction and development of buildings as companies.

Selim said that the latest land offering in new cities in the past few years by state-owned project Bayt Al Watan is the biggest example of the failure of land allocations for individuals.

This was brought about as a result of the delay in the reconstruction of these areas. Nevertheless, companies have the ability to develop, build, and market in a way that individuals do not.

He further elaborated that the decision to halt land sales to individuals helps them obtain their rights. As a result of the halt in such sales, the state will be able to apply its provisions and laws on companies in a larger and wider way.

The current reconstruction policy means overcoming individuals’ selling lands, and opens up good investment opportunities for all investors. Individuals can also unite in partnership to open a company and start investment in lands. This also includes starting the legal process of selling under the supervision of the state, he concluded.

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