Fathallah Fawzi, the Vice President of the Egyptian Businessmen’s Association and the Chairperson of its Construction and Building Committee, said that the real estate sector in Egypt is facing a new crisis due to the increase in costs. He added that the impact of the Central Bank of Egypt’s decision to liberalise the exchange rate will soon be evident in the real estate development.
He attributed the rise in steel prices to the shortage of foreign currency and the challenge of setting prices for real estate developers who need to buy raw materials and building supplies.
Fawzi stressed that the fluctuations in steel prices have caused a major crisis and that the price differences are a serious problem for the real estate sector. He said that large real estate developers are less affected than small ones by this situation.
He revealed that the contractual relationship between the developer and the client has suffered from the price fluctuations of building materials and other factors. He emphasized the need for the client to pay the instalments on time and not to delay them, otherwise the unit could be withdrawn from them.
The head of the Construction Committee said that some real estate developers have stopped construction for various reasons, while others may opt for mergers or exit the real estate market due to the instability. He said that “90% of clients sign contracts before they see them,” and advised them not to sign any contracts without reading them carefully.
He explained that the real estate sector is facing very large constraints, and called for the necessity of rescheduling the instalments for the developers’ lands for a longer period, such as a year and a half.