The flexibility of real estate companies to deal with the novel coronavirus (COVID-19) pandemic has enabled the sector to gradually overcome the crisis, according to Tarek Shoukry, head of the real estate development chamber at the Federation of Egyptian Industries (FEI).
These companies have also initiated new mechanisms to overcome the crisis which have allowed the sector to get back on its feet and return to its former activity.
Shoukry noted that the Egyptian real estate market has also seen changes related to the nature of the market.
He said mortgage finance is the only mechanism that can be relied on to bridge the gap between purchasing power and unit prices. This takes into account in particular the high cost of implementation and the continued stability of the purchasing power of customers.
In addition, there should be greater facilitation and acceleration of the procedures for obtaining mortgage funds, which will help spread the culture of mortgage lending in the Egyptian real estate market..
He added that one of the main demands of real estate developers regarding the expansion of the mortgage financing system is to be applied to off-plan projects. This would be done by gradual granting of mortgages to off-plan units and by installments until delivery of the unit.
âThe COVID-19 pandemic has affected the entire world and all economic sectors, including real estate, although the local real estate market has flexibly handled this crisis, resulting in multiple changes, namely an expansion of real estate companies in marketing their projects based on technology and electronic marketing, âsaid Shoukry. âIn addition, the pandemic has offered real estate developers new experiences to deal with any market crisis. “
Regarding the chamber’s efforts to support real estate companies during the peak of the pandemic, Shoukry added. âThere have been many mechanisms implemented by the Real Estate Development Chamber, in cooperation with the developers, to deal with the effects of this epidemic and keep the sales movement in the market since its emergence in Egypt until now. . “
He said that with the onset of the crisis in March, companies launched a “March Sale” which included promotional offers. Despite fragile consumer confidence and uncertainty, the offers caused a strong movement in the real estate market during this period..
“The chamber has also submitted a request to the Ministry of Housing, Utilities and Urban Communities to grant real estate companies an additional three months to implement their plans without late fines,” Shoukry said. “This has been approved and we have submitted a request to give developers an additional three months to absorb all the effects of the crisis.”
Since June and the gradual reopening of post-COVID-19 Egypt, the market has in parallel experienced a gradual evolution. During the current period, the real estate market is experiencing a performance which is approaching its normal levels.
Shoukry said this is expected to improve gradually with the purchase of the delayed and accumulated demand in the market during the crisis period.
He revealed that the Real Estate Promotion Chamber has prioritized a number of issues for the coming period, namely mortgage financing and the facilitation of its procedures. These have been brought to the fore in order to keep pace with changes in the market and the changing needs and purchasing power of customers.
In addition, the government was pushed to enact the Law on the Federation of Real Estate Developers. The federation will be the legal entity responsible for regulating the local real estate market, as well as studying any problems between developers and clients during projects.
There have recently been several complaints filed with the Egyptian Consumer Protection Agency (CPA) by customers, due to delays in the delivery of their units.
“Our goal is to find a balanced relationship with all parties [government, developers, and clients] and preserve the rights of all, âsaid Shoukry. “We would like to point out that the CPA works according to the law, which we agree on.”
He added: âWe are all working on the implementation of laws and labor control system in the real estate market. However, we need a dialogue between all parts of the real estate development system without making decisions based on vision from one point of view.
As a result, there must be a balanced discussion between the agency, developers and clients, and an independent technical entity. This would allow complaints to be discussed and facilitate a clear vision and action plan for the period ahead.
As a result, the Real Estate Promotion Chamber plans to hold a meeting with the CPA to discuss customer complaints regarding the dispute. This will then be presented to the parties concerned in order to develop an action plan and a clear vision that preserves the rights of all parties..
Shoukry said the recent decision by the Central Bank of Egypt (CBE) to cut the interest rate by 0.5% is in favor of the Egyptian economy. It should motivate investors to cooperate with the banking sector to advance the wheel of investment and growth.
In addition, the decision maintains the continued development of real estate projects, in particular there are a large number of real estate developers eager to obtain loans. The funding will help these developers either complete current projects or invest in new expansion opportunities.
In a different context, Shoukry announced his intention to run as a candidate in the next legislative elections.
He said: âAnyone with experience should work to make the most of that experience by serving their country as a duty to their homeland. I decided to take advantage of my accumulated experience in housing and investment, by running for the House of Representatives, to serve as the spokesperson for the real estate sector in parliament to approve the necessary legislation for the sector and its oversight..“