By Amr Hosny

Translated By Wael Hossam El Din

Recently, Egypt has placed a significant emphasis on advancing urban development in various governorates, with a specific focus on accommodating low-income and even lower-income groups. This commitment involves providing them with affordable housing options and support facilities, all while ensuring sustainable development practices and spreading green spaces adhering to global standards.

Notably, various countries are working to address climate change. Egypt demonstrated its commitment by hosting the 27th Conference of the Parties (COP 27) on climate change in Sharm El-Sheikh in December 2022.

Private companies and exhibitions have also emphasized the same goals, as seen in the upcoming Cityscape Egypt 2023 exhibition, scheduled for September 20 to 23, 2023. The exhibition invites interested parties from various governorates in Egypt and the region who are involved in the real estate sector.

Urban Development Importance

According to global statistics, as stated by the Arabic version of the United Nations, approximately 56% of the world’s population (4.4 bn people) lives in cities. These numbers are anticipated to hike in the coming period, with the urban population projected to more than double by 2050. Around seven out of every 10 people will live in cities at that time, contributing to over 80% of the global Gross Domestic Product (GDP).

In Egypt, the current annual urban growth rate is 2%. Notably, the Egyptian government has aimed to eliminate unsafe construction in slum areas for EGP 63 bn.

Collaborative Development: Egypt Partners with China, the Gulf Cooperation

Khaled Saddik, the CEO of the Urban Development Fund affiliated with the Council of Ministers, announced a month earlier ongoing negotiations with an alliance consisting of Gulf, Egyptian, and Chinese companies to develop 185 acres of land in the Kafr El-Sheikh Governorate for a residential, hotel, and commercial entertainment project.

Meanwhile, the government is completing the construction work for the Al-Rawdah 2 project in the Sayeda Zeinab district in Cairo. The project comprises nine residential buildings, numerous commercial stores, and service facilities as part of the state’s plan to provide affordable housing.

Payment Solutions in Coordination with Multiple Banks

The Egyptian government has launched an initiative in coordination with five banks: the National Bank of Egypt (NBE), the Qatar National Bank (QNB), the Commercial International Bank (CIB), the Housing & Development Bank (HD), and the National Bank of Kuwait (NBK).

These banks have agreed on several conditions, focusing on the individual’s age. The borrower must be at least 21 years old at the time of the loan application, and their age should not exceed 65 years at the end of the financing period or the age of retirement for employees, whichever comes first. The maximum age allowed for retirees and pension beneficiaries is 75 years at the end of the financing period. These conditions apply to Egyptian citizens only.

Through these initiatives, governments aim to facilitate property ownership for private, government, and craftsmen. This is in line with the ongoing construction of properties and buildings in new cities and the capital cities that the government is currently working on. The key conditions include the possibility of providing up to 90% of the total unit value and fixing the decreasing interest rate at only 3% to alleviate the burden on low and middle-income individuals.

The government has shown its commitment to supporting low-income individuals by setting a minimum monthly net income requirement for eligibility for the real estate financing system. The requirement is EGP 1,200 for low-income individuals and EGP 2,500 for middle-income individuals, as notified by the participating banks.

Prioritizing Green Spaces

The Egyptian government is keen on increasing green spaces in new cities. The planned new cities ensure that each individual’s share of green spaces is no less than 15 sqm, which is the global average. For instance, the New Administrative Capital (NAC) allocates 60% of its energy needs to renewable sources and 40% of its roads for pedestrians.

To increase the individual’s share of green spaces, improve air quality, and combat desertification, the Ministry of Environment is planting a total of 30,000 trees in Cairo, Giza, and Qalyubia

In addition, 50,000 trees are being planted annually in different governorates nationwide, in an initiative being coordinated between the Ministry of Environment and the General Authority for Roads and Bridges. Furthermore, there are plans to plant 17,000 trees along the Cairo Ring Road, Wadi El Natrun Road, and Alamein Road.

President Abdel Fattah El Sisi has launched an initiative to plant 100 mn trees within seven years. The Ministry of Environment aims to contribute 13 mn trees during the initiative, with 1.3 mn trees planted in the current year. The goal is to plant two mn trees annually throughout the initiative.

Real Estate Experts’ Views on the Egyptian Market

Real estate expert Fathallah Fawzy, Vice-President of the Egyptian Businessmen Association, stated that the facilities provided by the Egyptian government in terms of payment were beneficial at a certain time. However, due to currency fluctuations, they have become less effective. Therefore, he believes they should be reviewed in light of the rapid price changes, aiming to provide greater opportunities for buyers shortly. This is what the Egyptian government is striving for.

Fawzy further explained that the payment facilities offered by the private sector are not in their favor. The buyer pays around 50% of the property value, and after a period, the developer increases the prices significantly, causing losses for the developer. Therefore, he advises the private sector to shorten the payment period to around four years maximum, instead of eight or nine years. Even if this affects the sales volume, it would be the best solution that ensures gains for investors and real estate developers, aligning with the rapid price changes in Egypt.

Furthermore, Fawzy emphasized that the real estate market in Egypt requires further payment facilities due to price fluctuations. He also mentioned the need for more market regulations and laws to maximize the benefits of the real estate market for all parties involved.

Regarding sustainable development standards and expanding green spaces in urban areas, especially in new cities, he noted that only a small percentage of companies adhere to these standards due to the high costs of implementing green spaces in new properties. Small real estate developers cannot meet this requirement, while larger developers can fulfill it. However, this does not negate the continuous efforts of developers to implement a green and smart environment while working on water conservation and alternative energy sources.

Ahmed Ezz ElDin, a real estate and financial expert, explained that the government initiatives aimed at facilitating payment methods and supporting middle-income and low-income groups have had a positive impact.

Additionally, these initiatives must be further developed, especially in light of the fluctuating exchange rate of the Egyptian pound against the US dollar. He mentioned that the government cannot continue providing support indefinitely. Still, it has acted wisely to facilitate conditions, particularly for those with limited support affected by local and global economic conditions.

Notably, Ezz added that green spaces in new areas are well-planned, and the government is keen on preserving them. However, green spaces in older populated areas face risks due to construction covering 100% of the land. This requires active involvement from the local communities and prudent management to ensure the provision of water for these various green areas.