Egypt’s urban expansion plan targets to reach 12% of country’s area
State allocates about EGP 1bn to support mortgage interest rate, says deputy housing minister
Egypt’s urban expansion plan targets to reach 12% of the country’s area as well as the development of all cities, Khaled Abbas, deputy minister of housing for national projects, said.
During a Seminar organised by the Egyptian Businessmen’s Association ( EBA) on Wednesday, Abbas added that there is a high demand for development projects in New Cairo, however the Upper Egypt cities have not yet considered by investors.
“We are selling several plots of land in the new cities with areas of 50 feddan, but they are not enough for urban development transformation, therefore, there must be a kind of awareness among investors to develop new cities in Upper Egypt” Abbas said.
“We have wonderful cities in Upper Egypt, such as New Aswan, which was equipped with all required services. Moreover, we do not negotiate over the price of land in Upper Egypt, because the infrastructure’s costs are high.”
“In all new cities, the government targets all social segments unlike the past. The Housing Ministry also offers excellent residential projects for low, middle, and upper middle- income segments,” Abbas elaborated.
As for the updates of the new real estate developers’ union law, Abbas noted that the ministry is working hard on the new law and other integrated laws under the president’s instruction to speed up issuing process of laws and regulations regulating the real estate market. Therefore, a committee inside the Ministry of Housing was formed including representatives from all stakeholders to draft the real estate developers’ union law, as was the case for the Egyptian Federation for Construction and Building Con tractors.
Abbas noted that Egypt’s current presidency of the African Union will stimulate the exports of the construction sector to Africa, adding that the ministry seeks to provide export incentives to support the sector.
Commenting on limiting the Central Bank of Egypt’s ( CBE) mortgage initiative to low- income people, Abbas clarified that the initiative was not suspended but the money allocated for the initiative had already been disbursed, however, the ministry is studying other alternatives to support the middle- income segment.
He revealed that the state allocated about EGP 1bn to support mortgage interest rates, which represent a great burden on the state, saying, “It was unlogic to provide mortgage to a unit that costs EGP 2m, so the state will provide mortgage only for people who are in real need for housing and categorised as low- income people.”
For his part, Hussein Sabbour, chairperson of Al Ahly Real Estate Development Company, criticised the state’s interference in the market as developers.
Abbas denied that the state competes with real estate developers as the government works in the market with the same mechanism of the private sector, however, there is still a gap between the demand and supply in all segments, pointing out that Egypt’s population will increase by 9 million people in 2022.
Hisham Shokry, chairperson of Rooya Group, negated that there is a bubble in real estate market, however, he explained that the deceleration in market’s sales was due to the increase in units’ prices in the light of the decline in purchasing power of customers although there is a huge demand on properties in Egypt.