Deputy Minister of Housing, Utilities, and Urban Communities for National Projects Khaled Abbas has confirmed that the annual investments in the real estate sector stand at EGP 700 bn – EGP 800 bn, of which 60% are provided by the public sector, Invest-Gate reports.
The news came during a panel discussion on the sidelines of Akhbar Al-Youm’s seventh Economic Conference on December 19, entitled “The Egyptian Economy, Achievements, and Challenges in Light of the Coronavirus Pandemic,” Abbas stressed that Egypt’s National Strategic Plan for Urban Development 2052 aims to double urban areas to accommodate the expected population boom.
The one-day event explored the challenges of exporting real estate, paired with the role of financing to achieve development goals. Participants agree that the coming 30 years call for intensive preparations from all parties (public and sectors, banking industry, and financial institutions), during which Egyptians will reach 160-180 mn, which reflects the need for new financing alternatives to achieve a balance between supply and demand.
Talaat Mostafa Group (TMG) Holding CEO and Managing Director Hisham Talaat Mostafa emphasized that real estate can solve all of Egypt’s problems. The annual construction of 1 mn housing units means adding EGP 2 trn to Egypt’s GDP and boosting the state’s sovereign tax revenues by almost EGP 400 bn per year.
The generation of numerous job opportunities and improvement in development rates are a handful of takeaways in this regard, thus contributing to Egypt’s recognition of a major economic and development shift on a global level.
That is why amidst anticipations of several pitfalls throughout the coming 30 years, some 30 mn housing units should be built in the next three decades, while at present there are about 22 mn residences, Mostafa added.
“The provision of long-term financing at an appropriate interest rate would allow developers to carry out their development plans. Moreover, the state should focus on attracting foreign companies to maximize ongoing infrastructure, utility, and electricity projects, wherein the private sector shall have a role through different public-private partnerships (PPPs),” he was quoted as saying.
According to Rooya Group Chairman and CEO Hisham Shoukry, merely 3% of residential units in Egypt depend on mortgage finance. He underlined that lowering interest rates will contribute to launching innovative ideas to expand the country’s mortgage market.
The panel was moderated by Tatweer Misr President and CEO Ahmed Shalaby, who uncovered the following recommendations by day-end:
– Organizing a conference to attract foreign investment for urban development by the end of March 2021.
– Attracting foreign investment funds to tap into the Egyptian market.
– Setting a comprehensive urban development strategy to enable the development of extensive urban areas based on a specific system.
– Creating new mechanisms for real estate financing compatible with the Egyptian model of development, specifically catering to off-plan developments.
– Working to reduce the gap between supply and demand in the Egyptian real estate market by providing projects commensurate with the weakening consumer purchasing power.
– Allowing developers to present new and innovative ideas for developing projects in new cities, especially the New Administrative Capital (NAC).