Egypt’s Minister of Investment Mahmoud Mohie Eddin announced the cabinet’s approval of a new bill on real estate finance to be discussed by parliament during its next term. The new bill aims to improve market efficiency and oversight.
In a key speech at the Euromoney Egypt Housing and Real Estate Finance Conference, held in Cairo yesterday, Mohie Eddin said the new law will enhance the supervisory function of the Egyptian Financial Supervisory Authority, since it limits the practice of real estate to license holders.
The proposed bill prevents the merger of real estate finance firms unless each firm is counted as belonging to institutions working within the sector. Clearance from the supervisory authority must still be obtained. The law also grants authority to impose variable penalties on companies violating the regulations.
Mohie Eddin said that accreditation for companies specializing in real estate finance is underway, and will operate according to the policies of the Ministry of Investment’s real estate finance fund.
The minister also referred to the positive growth rate attained by the real estate sector, in spite of global economic crisis, which stood at 14.7 percent in the third quarter of the current fiscal year, up from 5.1 percent in the last year. He added that the same sector has witnessed a major shift, as the number housing units constructed through the real estate finance system jumped to 36,702, with the total funding of LE4.2 billion. Seventy percent of finance beneficiaries are low-income citizens, Mohie Eddin said.
Mustafa el-Hayawan, head of the ministry’s real estate fund, said the fund plans to secure around LE4 billion for real estate financing within the next few years, and has signed deals with a number of banks in order to finance housing for those with low income, including the National Bank of Egypt, Alexandria Bank, and National Societe General Bank.
El-Hawayan’s deputy, Mai Abdel Hamid, said the Ministry of Housing has suggested a new financing program that sets the size of funding according to the beneficiary’s income.
Translated from the Arabic Edition.
