At last, people on limited incomes can afford to buy a home, thanks to an initiative from President Abdel Fattah El Sisi.
The initiative, launched by the president earlier this month, will enable first-time homebuyers to take out low-interest bank loans that are repayable over 30 years.
The Central Bank of Egypt (CBE) will make house loans at 3 per cent interest, thanks to the president’s initiative, which, experts say, will re-invigorate the real estate market.
“The initiative is a fantastic chance to revive mortgages,” leading property developer Mohamed al-Bostani told a local newspaper. “This will help ordinary people and benefit the national economy.”
The CBE says it will announce fuller details of the initiative soon along with the regulations on loans.
The initiative comes at a sensitive time for the local real estate sector, mortgage lenders and the national economy.
The real estate sector has been in recession, not only because of the effects of the Covid-19 pandemic, but also because of a property glut.
The intervention of the government as a real estate developer has brought housing for everybody in this country as a consequence of insistence on the part of the administration of President Sisi to end housing shortages.
But despite abundant housing, the government did not bring house prices down.
Lack of demand is a tremendous headache for private real estate developers, who have been trying to market installment plans such that an apartment can be paid for within ten years.
The private sector has emerged as a competitor for the nation’s mortgage system, which has been plagued with problems already due to the complexities and mountains of paperwork associated with mortgages.
The president’s initiative promises to solve all these problems, developers said.
Property developer Amr Suleiman expressed hope that the initiative would put an end to the recession that has strangled the real estate sector for several years.
“There is urgent need for new ways to create a demand for housing,” Suleiman said. “There is a lot of offer in the market and the demand has to equal this offer.”
Even so, there are fears that regulations emanating from the initiative will exclude most citizens from the housing market.
For many on low- and middle incomes, terms and conditions in the regulations might be difficult to meet.
Discussion about this post