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The Central Bank of Egypt (CBE) has agreed to renew a mortgage financing initiative aimed at helping to finance mid-income housing units, the chairman of the country’s Real Estate Development Chamber has said.
The initiative will be re-introduced from July, with funding offered with a 10.5 percent interest rate, the chamber’s chairman Hisham Shoukry said at a developers’ conference in Cairo on Monday.
"That would give a strong push to real estate market coming period," Shoukry said.
The Central Bank had previously launched a mortgage finance initiative in 2014, which ran until earlier this year, providing potential homeowners with long term loans of up to 20 years at low rates of between 5-7 percent. The initiative was largely halted in January, although it remains open to low-income groups.
However, the move substantially reduced the amount of people who could access the funding required for them to purchase homes, particularly in the mid-income segment.
Hisham Talaat Moustafa, CEO and managing director of Talaat Moustafa Group, said that this was an issue, given a spike in construction costs, “which has led to an increase in property prices by 80 percent since 2016”.
Amr Soliman, the founder and chairman of another major developer, Mountain View, said: "The real estate sector is the main driver of economic development in Egypt. I am confident that real estate developers are able to meet the challenges of financing and professional standards, in co-operation with governmental institutions in Egypt.”
Talaat Moustafa said that the Real Estate Development Chamber, which is aligned to the Federation of Egyptian Industries, had also been working to make sure real estate firms were properly certified and classified in order to protect potential clients and the stability of the real estate market.
“There is a limited number of new companies that do not have strong experience, but the rest of the market is based on strong companies with strong financial and technical expertise and solvency and is committed to its contracts and responsibility to the state and customers," Talaat Moustafa said.
(Reporting by Marwa Abo Almajd; Editing by Michael Fahy)
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