Several real estate companies have suspended sales of residential units to reprice amid increases in interest rates nationwide, reported Al Mal.

This follows a directive from the New Urban Communities Authority (NUCA) demanding developers pay the difference on purchased land following the 3% increase on interest rates following the Central Bank of Egypt’s decision to increase the interest rate to 15.75%.

The increase in interest rate is applied to the value of the lands that developers have received from NUCA, unnamed sources in real estate companies told Al Mal.

This increase further adds to the investment cost for real estate companies, in addition to the increase in price of building materials, that together will contribute to raising the prices of units.

One real estate developer, who preferred to remain anonymous, stated that the company will be increasing the prices of units by 15% this week as a result of the abovementioned factors. He urged that building facilitations be provided, rather than adding further burdens on developers, projecting that other developers will increase the price of their units by 25%.

Mohamed Banany, Deputy Chairman of Coldwell Banker, stated that real estate companies postponed selling and marketing their projects last week to re-price their products due to the instability of foreign currency, noting that developers are also facing severe challenges of continuing the construction of current projects due to inflation and the increase in prices of building materials.

Although many residential projects will witness an increase in prices, periods for installments will be extended to an additional year and down payments will not increase, in efforts to encourage potential buyers to purchase in such a rigid market, he added.