Head of the Egyptian Financial Supervisory Authority (EFSA) Sherif Sami said the authority is finalising the procedures for the first mortgage union elections.
The union will comprise all mortgage stakeholders and will be established before Ramadan, to facilitate financial procedures for the real estate sector.
In a Tuesday roundtable discussion entitled “Development Partners Initiative”, Sami revealed that the total portfolio of mortgage companies on the Egyptian market is EGP 2.5bn.
Sami added that the Egyptian real estate finance system’s weakness is due to the difficulty of registration procedures and high financial requirements of this activity.
The EFSA has demanded that the cabinet form a committee that includes the Ministry of Justice, mortgage companies, and real estate experts, to discuss the constraints and facilitations of registration procedures, Sami said.
Central Bank of Egypt (CBE) Deputy Governor Tariq Fayed predicted that the EGP 10bn allocated by the CBE for reviving mortgage initiatives will be spent within 12 months.
Fayed said the CBE’s interest is in providing long-term financing of up to 20 years, as well as a 7% decline in interest rates for low-income people, and 8% for middle-income people.
The real estate sector has the ability to raise economic growth, and it is participating in 60 to 70 related industries. The available funding to the real estate sector ranges from EGP 10bn to EGP 12bn, which is insufficient as the sector needs over EGP 1tn, according to Fayed.
Minster of Investment Ashraf Salman said that the size of contracts does not exceed 2,000, which is frustrating.
Salman called for the transferral of the Ministry of Irrigation-affiliated Egyptian Survey Authority (ESA) to the Ministry of Justice, to unify all the measures relating to mortgage activity. In addition to this, a specific formulation for financing real estate under construction in the mortgage law should be developed to increase its rates in the future.
Mortgage Finance Fund (MFF) head Mai Abdel Hamid said the real estate market is suffering from a deficit of two million housing units annually, and partnership with the private sector is the solution to increase the number of housing units.
Abdel Hamid added that the Ministry of Housing has launched four stages of the social housing units project, and about 155,000 applicants, or 70%, failed to meet the required conditions.
She noted that the MFF is committed to providing 240,000 units within the framework of the social housing units project, with funding from the World Bank amounting to EGP 1.6bn.