Translation: Muhammad Khalid

Over 2022, the Egyptian government worked on expanding the area of buildings and increasing urban projects, in addition to enacting more regulating laws for the real estate sector, and studying many proposals to support the activity.

Decisions and events varied between protecting citizens and regulating sales, which gives it more credibility, in addition to moving towards digitizing the sector, supporting developers to continue their activities, and providing sources of financing. In this report, Invest-Gate gives an account of the key decisions and proposals that were studied and approved in 2022.

Sector’s Supporting Proposals 

In January 2022, Mostafa Madbouly, Prime Minister, discussed a number of proposed amendments to the regulations of real estate funds, stressing that they represent an important and effective mechanism for maximizing real estate investment opportunities, and providing financing sources for activities related to the sector.

As regards the procedures for revitalizing the mortgage finance sector, Madbouly gave directives for the formation of a small working group that includes a number of competent officials to study how to advance the sector and boost its growth, due to its many positive effects, by approving more legislative and procedural amendments, in full coordination between the government, the Central Bank of Egypt, and the competent authorities. Madbouly also gave directives for accelerating the drafting of the real estate developers law and preparing media campaigns for the amendments to the real estate registration law, and the facilitations it includes for registration procedures.

Exporting real estate hasn’t been neglected by the Egyptian government. In that context, the prime minister reiterated, during his meeting with two real estate developers last October, that the government aims to expand the export of Egyptian real estate and is seeking to create a roadmap for the development of the sector at the economic conference. In the same month, the Egyptian Prime Minister revealed, in one of the sessions of the Economic Conference – Egypt 2022, that the government considers taking regulatory measures to facilitate foreign ownership of real estate units and rewarding it with long-term residence permits.

Laws & Decrees

Last March, President Abdel Fattah El-Sisi ratified Law No. 5 of 2022 amending some provisions of Law No. 114 of 1946 regulating real estate registration. The amendment encourages citizens to register their properties in the real estate registry in order to avoid property disputes.

El-Sisi issued Decree Law No. 21 of 2022 in April amending some provisions of Law No. 120 of 1982, to regulate commercial agency business and some commercial and real estate brokering activities, after the amendments to the law were approved by the House of Representatives in March. The amendments aim to introduce new rules to regulate the sector. They require the Ministry of Trade and Industry to maintain a record of real estate brokers and any person practicing this profession.

Last June, a decree was issued stipulating that concerned entities are obligated to include controls for unit sales in real estate development projects in the documents required for their launch. The decree also provided for annexing such controls to contracts between developers.

Mohamed Maait, Minister of Finance, confirmed in July that the Cabinet agreed that the public treasury should bear the cost of real estate tax due on properties built for industrial sectors, for 3 years starting from January 1st, 2022, with an expected total cost of EGP 3.3 bn.

Furthermore, the Board of Directors of the New Urban Communities Authority (NUCA) agreed in July to grant a grace period of 6 months, as an additional facility, for all plots of land that are used for integrated urban development, including services, entertainment, clubs, industrial projects, and allocated for real estate investment companies, associations, syndicates and entities in the new cities. NUCA’s grace period is inspired by the Cabinet’s decision last March to extend the deadline for the execution of contracts due to the negative effects of the Russian-Ukrainian crisis, according to presidential directives.

In November 2022, the House of Representatives approved a draft law submitted by the government to amend some provisions of Law No. 27 of 2018 regulating some real estate registration provisions in new urban communities, which aims to stabilize transactions associated with rights in rem, which reflects positively on the investment climate. It puts further simplification of procedures and removes obstacles for citizens regarding registration of their real estate transactions in the new urban communities.

In a similar vein, the Egyptian government announced, through a decree by Prime Minister, reducing the financing tranche allocated to the mortgage financing initiative for the middle-income segment, with an interest of 8% at a diminishing basis, to EGP 15 bn from EGP 50 bn. The government’s decision included transferring the responsibility for supporting 5 initiatives with subsidized interest from the CBE to 3 government entities.

Additionally, the Cabinet issued decree No. 4664 of 2022 last December, amending some provisions of the executive regulations for the capital market issued by the Minister of Economy and Foreign Trade’s decision No. 135 of 1993. The new Decree provides for establishing a voluntary market on the Egyptian Stock Exchange (EGX) for the trading of decarbonization certificates, incentivizing and supporting private sector companies in various fields to aim to achieve sustainability which has become a trend recently in the real estate sector.

Towards Digitization

In the context of supporting digital services in the Egyptian real estate sector, a cooperation protocol was signed in March for the provision of digital cadastral services to the Real Estate Registration and Notarization Authority, between the Ministry of Justice, the Ministry of Planning, and the Military Survey Administration. This is part of the national project to facilitate real estate property registration procedures, which aims to give the real estate investment environment permanent stability.

Similarly, the Ministry of Justice signed in November a cooperation protocol with Telecom Egypt for the provision of real estate and notarization services in the company’s branches.

In December, the Cabinet inked 3 cooperation protocols for restructuring government applications for companies, facilities, social security, and real estate wealth.