An Awesome Behind-the-Scenes of the Egyptian Real Estate Development Chamber
Toward the end of 2022, the Board of Directors of the Real Estate Development Chamber at the Federation of Egyptian Industries reviewed the most important achievements that it made during the prior year. These achievements were made possible through collaboration with the Housing Committee in the House of Representatives and frequent check-ins with government officials about the challenges facing the real estate market. The board closely followed developments in the market and constantly analyzed their impact to identify key paths forward.
The chamber has worked diligently to support real estate development companies in Egypt and create a positive environment in which the market can continue to grow. Here’s what you need to know about the chamber and its recent work.
Promoting Investor Confidence
A major function of the Real Estate Development Chamber is to bring the challenges faced by development companies to the attention of government authorities. This way, officials can work directly with the developers to create a solution that works not just for them, but also the overall market. Solving the major problems facing the sector helps ensure that it can continue to grow without serious issues or setbacks.
In Egypt, the government has shown considerable support for the real estate sector. Its unprecedented backing has gone a long way to build confidence among both domestic developers and international investors. The chamber plays an important role in bringing concerns to the forefront and pushing for quick resolution.
Seeking Policy Input
Egyptian government officials have also looked to developers as they create new policies. Before any strategic decision gets finalized, input is sought from developers so they can weigh in on the local market and provide guidance. This communication has allowed for the continued success of the real estate market.
Developers have unique insight on how the market can be made more accessible or attractive to end users and investors. Government policy must consider the business side of the real estate market and getting direct input from developers helps ensure that the goals from both sides align. When this happens, the market can grow while driving larger economic development in a sustainable manner.
Licensure and Project Approvals
The success of the Egyptian real estate market also depends on the speed of ministerial decisions, including licensure and project approvals. The New Urban Communities Authority approves about 220 projects each year. This is a large number that has attracted many investors to the sector while driving development rates.
Currently, the real estate sector contributes about 20 percent of Egypt’s gross domestic product and creates 5 million job opportunities. The urban development plan being implemented in Egypt, including the creation of a new administrative capital, makes the real estate sector a primary focus, which explains why these decisions come so quickly.
Maintaining Market Growth
Moving into 2023, Egypt has some new plans for continuing market growth. The chamber intends to address some of the biggest hurdles still facing the industry, including the skyrocketing cost of building materials. This has impacted the overall cost of construction and thus affected selling prices, undermining market confidence and making real estate out of reach for many Egyptians.
Several solutions to this problem have been proposed, and a meeting is planned to review these options and call for other suggestions. Ultimately, the solution needs to address the needs of Egyptians and foreign investors as well as developers. For developers, the increased cost of building materials is a major risk if they are not able to sell the property when construction is complete.
Empowering Domestic Buyers
Part of the solution will involve collaboration with the Chamber of Building Materials to create an online application that tracks prices of building materials and sets price caps to protect the market and developers from unfair hikes. However, there is also a push to increase the purchasing power of Egyptians by expanding mortgage financing opportunities through the Central Bank of Egypt.
With a wider range of options including low interest rates and simple applications, more people would be able to buy property. This could help bridge the gap between current purchasing power and sale prices to keep the market developing despite prices that are quite high. At the same time, Egyptians are not the only target market for the real estate industry and efforts are being made to attract foreign investors.
Attracting Foreign Investors
To attract foreign investors to the market, the chamber is preparing to participate in several international property exhibitions while working to empower individual developers to market their projects at these events. Furthermore, the chamber is working with some third-party companies to formalize the process of online property sales for Egypt.
Online sales eliminate many of the barriers that foreign investors now experience when they attempt to enter the market. However, there is still the issue of confidence, especially if someone completes a purchase online. To increase confidence among foreign investors, the chamber is creating a database of all developers that will include basic information on the company and details about past developments.