Egypt property market strong as conservative market policy shielded recession
A conservative mortgage market has shielded Egypt from the worst excesses that led to the global economic downturn and left the country’s real estate market in a prime position to move forward in 2010, it is claimed.
Egypt will be one of the most attractive destinations for real estate investors in 2010, delegates were told at the first Global Trade Matters Real Estate Egypt Conference which included panelists from the top ranks of government, the private sector and academia.
They also heard there is still plenty of opportunity for expansion in Egypt as GDP and demographic growth continues.
Iman Ismail, managing director of EMRC, said conservative lending was the main reason that Egypt did not experience the kid of catastrophic collapse seen in the US real estate market. ‘Egypt’s small mortgage market only started to develop over the past six years so we have been shielded from the global real estate crisis,’ said Ismail.
A good economic outlook will boost the property sector according to Zaki El-Guiziri, vice president of the Talaat Moustafa Group. He predicted that the country’s growth rate will be above 4% in 2009 despite the global crisis.
‘If this growth continues, as is expected, there will be many benefits for the real estate industry. A large part of the population is marriageable age or below. This will ensure demand for years to come,’ he added.
The fact that Egyptians like investing in property means that the industry does not rely as much on foreign investment as other emerging property markets, according to Hala Bassiouni, managing director of the Egyptian Finance Housing Company. ‘Egypt has a culture that loves fixed assets. People feel it is very important for young couples to have a house bought before they get married. They buy houses for when their children get married or for investment,’ he explained.
The mortgage market though still has to overcome cultural barriers. ‘Families don’t consider a house for marriage acceptable if it comes with 20 years worth of debt. The cultural idea of young couples finding a lifelong family house with no debt must change,’ she added.
There were also calls for a major overhaul of bureaucracy from developers. Ashraf Farag, chairman of El-Arabia Real Estate, said it took a year and a half for electricity to be connected to his projects near Cairo.
There was also support for green developments. ‘There is a lot of room for potential growth of demand for green buildings coming from consumers and developers because green building saves 30% on energy bills. Green design also adds excellent value to a home,’ said Medhat Dorra, CEO of Space Design.