- Life Style
Several real estate companies are facing difficulties in completing projects, according to workers and experts in the real estate industry.
A considerable number of clients have canceled contracts and banks are unwilling to finance projects, they said, and this will force companies to reduce prices over the coming period to avoid market stagnation.
Maged Abdle Azeem, a real estate expert, said demand for housing units - especially luxury ones - has severely declined, adding that the drop in tourism will have repercussions on the tourist and recreational real estate sector.
Abdel Azeem added that several people have withdrawn down-payments, particularly in those projects which have not yet begun. This has affected companies' marketing and sales plans.
He said banks are being extremely cautious in granting loans for real estate projects, which has deprived companies of funds to implement projects.
Mamdouh Ibrahim, another real estate expert, said the prices of luxury and average housing units will likely drop in the near future.
He added that the current conditions will help correct the price structure of housing, for the exaggerated prices were unjustified - especially after it was revealed that several investors were given land by direct order at prices much lower than market rates.
Hisham Shokri, the chairman of Royaa real estate company, said most companies have contractual commitments that they cannot go back on for reasons related to marketing, funding and planned profit margins, and therefore expect prices to remain at current levels.
He added that real estate companies will not reduce prices in the projects planned for the coming period, due to the high level of risk involved in their implementation.
Translated from the Arabic Edition