Housing Finance in Egypt
Overview
This profile is also available in French here.
To download a PDF version of the full 2023 Egypt country profile, click here.
Egypt is the most populous Arab country, with 103.808 million people. The population is expected to reach 132 million by 2032 and 190 million by 2050. Population growth and the need for housing will increase the housing deficit. President Abdel Fattah el-Sisi says the country’s high population growth rate hinders development.
Egypt’s 2016 National Program for Economic Structural Reforms improved economic indicators. The IMF predicts Egypt’s GDP will grow 5.9% in 2022. Egypt’s 2020-2021 GDP grew 3.3%. In March 2022, the Egyptian pound fell 14% against the US dollar, to E£18.54. In March and May 2022, the CBE raised interest rates by 1%. Overnight deposit, lending, and main operation rates reached 11.25, 12.25, and 11.75 percent.
The Mortgage Finance Fund executed 5,540 mortgage finance contracts worth £7.3 billion in 2022. Mortgage refinancing fell 23.6% to £745.5 million during the same period. 1,026 microfinance firms, with 2,418 branches, grew by 53.7%. The programme allocated E£50 billion ($2.7 billion) for mortgage financing for individuals and families with a maximum monthly income of E£40,000 and 8% interest. The CBE expanded the initiative’s guidelines in October 2021. The project’s funding includes the maintenance deposit.
Low-income housing unit prices range from £400,000 to £450,000. Fully finished homes can cost up to £1.7 million (US$90,416.)Middle-income borrowers can borrow 85% of the property’s value, and low-income borrowers can borrow 90%.
Egypt is geographically susceptible to climate change. Climate change will increase migration and unemployment. The National Climate Change Strategy 2050 was launched to combat this. It aims to improve life, housing, economic growth, and Egypt’s natural resources.
New consumer protections have been established. Despite many state interventions, neither side of the market benefited due to bank constraints. Because of Egypt’s prominence in the Arab region, the CEO of Saudi Egyptian Developers is optimistic about the Egyptian real estate market.
Find out more information on the housing finance sector of Egypt, including key stakeholders, important policies and housing affordability:
- Overview
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Legislation
- Opportunities
- Availability of Data on Housing Finance
- Green Applications for Affordable Housing
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.
Download yearbookEgypt
Overview
Egypt is the most populous country in the Arab world with 103.808 million people.[1] The childbearing rate is 2.9 children per woman, which is estimated will increase the population to 132 million by 2032 and 190 million by 2050.[2]This will increase the housing gap in Egypt, due to the association between population growth and the need for housing units (500 000 units yearly). President Abdel Fattah el-Sisi has commented that the increasing population growth rate has been an added burden to the nation’s development projects.[3] With this rapid population increase, the housing sector in Egypt is suffering from high demand for and a shortage of affordable housing units for low-income people.
The National Programme for Economic Structural Reforms that Egypt started in 2016 had a positive effect on the economic indicators. The first phase included floating the national currency, removing subsidies and raising the price of fuel and electricity, and imposing a value added tax. The second phase of the programme started in April 2021 and targets structural reforms in the manufacturing, agriculture, telecommunications and information technology sectors.[4] The International Monetary Fund (IMF) maintained its forecast of gross domestic product (GDP) growth in Egypt at 5.9%[5] for 2022 despite decreasing its forecast of world growth from 6.1% last year to 3.2% in 2022.[6] Egypt’s GDP grew by 3.3% during the fiscal year 2020/2021.[7] The headline inflation rate was 13.6% in July 2022 compared to 13.2% in June 2022, with an increase in the price of building materials.[8]
In March 2022, the Central Bank of Egypt (CBE) devalued the Egyptian pound by nearly 14% against the US dollar to reach E£18.54 to a dollar.[9] During 2022, the CBE increased its key interest rates by 1% in March and 2% in May. Accordingly, the overnight deposit rate, overnight lending rate, and the rate of the main operation reached 11.25%, 12.25%, and 11.75%, respectively.[10]
Egypt is highly vulnerable to climate change due to its geographic characteristics. It is hot and arid as it is mostly desert, with a large population concentrated along one main river, and a coastline as its Northern border.[11] Egypt is also susceptible to water scarcity and rising sea levels, which impacts many sectors including agriculture and tourism, and endangers coastal cities.[12] Repercussions of climate change will include an increase in unemployment and migration between governorates. This internal migration will lead to unplanned urbanisation and urban sprawl into rural areas. In an attempt to combat this, the government has launched the National Climate Change Strategy 2050, which aims to improve the quality of life, promote sustainable economic growth, and preserve Egypt’s natural resources. The strategy’s first goal is “achieving sustainable economic growth and low-emission development in various sectors”. The second goal targets “enhancing adaptive capacity and resilience to climate change and alleviating the associated negative impacts”.[13] This goal’s focus is “protecting citizens from any negative health effects caused by climate change, and preserving the country’s ecosystems and green spaces”.[14] This goal will be achieved through providing good health care for people, Improving the health sector’s ability to handle diseases caused by climate change, and having skilled health teams.[15] Currently, due to sea level rise, up to one million housing units are at risk. It is expected that the annual loss in property value would be between E£7billion to E£16 billion (US$372.302 million to US$850.977 million) by 2060, not accounting for commercial properties.[16]
[1]Central Agency for Public Mobilization and Statistics (2022). Population in Egypt. https://www.capmas.gov.eg/Pages/populationClock.aspx (Accessed 25 August 2022).
[2] Rasheed, H.A. (2022). The population of Egypt internally expected to reach 103 million tomorrow. 21 February 2022. Al-Ahram Gate. https://gate.ahram.org.eg/News/3417131.aspx (Accessed 20 August 2022).
[3] Egypt Today (2022). Egypt’s population hits 103M people: CAPMAS. 6 May 2022.
https://www.egypttoday.com/Article/1/115533/Egypt-s-population-hits-103M-people-CAPMAS (Accessed 10 August 2022).
[4] Ahram Online (2021). Egypt announces launch of 2nd phase of economic reform program with focus on structural reforms. 27 April 2021 https://english.ahram.org.eg/NewsContent/3/12/410102/Business/Economy/Egypt-announces-launch-of-nd-phase-of-economic-ref.aspx (Accessed 5 September 2022).
[5] International Monetary Fund (2022). Arab Republic of Egypt. https://www.imf.org/en/Countries/EGY (Accessed 18 September 2022).
[6] Ourinchas, P.O. (2022) Gloomy and more uncertain. July 2022. International Monetary Fund. https://www.imf.org/en/Publications/WEO/Issues/2022/07/26/world-economic-outlook-update-july-2022 (Accessed 25 August 2022).
[7] Ministry of Finance (2022). Monthly Finance Report July 2022. Arab Republic of Egypt https://www.mof.gov.eg/en/archive/monthlyFinancialReport/general/Monthly%20Finance%20Report (Accessed 23 August 2022).
[8] Central Bank of Egypt (2022) Monetary Policy, Inflation. July 2022. https://www.cbe.org.eg/en/MonetaryPolicy/Pages/Inflation.aspx/ (Accessed on 20 August 2022).
[9] Casanovas, M. (2022). Egypt: Central Bank lets Egyptian pound tumble against the greenback. 1 Apr 2022. Focus Economics. https://www.focus-economics.com/countries/egypt/news/exchange-rate/central-bank-lets-egyptian-pound-tumble-against-the-greenback (Accessed 23 August 2022).
[10] Central Bank of Egypt (2022). Monetary Policy Decisions. Press Release. 19 May 2022. https://www.cbe.org.eg/en/MonetaryPolicy/Pages/PressRelease.aspx (Accessed 12 August 2022).
[11] World Bank (2022). Egypt: Acting Against Climate Change for A Healthier, More Prosperous Future. 19 April 2022. https://www.worldbank.org/en/news/opinion/2022/04/19/-egypt-acting-against-climate-change-for-a-healthier-more-prosperous-future (Accessed 6 September 2022).
[12] World Bank (2022). Egypt: Acting Against Climate Change for A Healthier, More Prosperous Future. 19 April 2022. https://www.worldbank.org/en/news/opinion/2022/04/19/-egypt-acting-against-climate-change-for-a-healthier-more-prosperous-future (Accessed 6 September 2022).
[13] Arab Republic of Egypt Ministry of Environment.(2022). Egypt National Climate Change Strategy (NCCS) 2050. https://www.eeaa.gov.eg/portals/0/eeaaReports/N-CC/EgyptNSCC-2050-Summary-En.pdf (Accessed 6 May 2022).
[14] Soliman, M. (2022). Egypt launches National Strategy for Climate Change 2050 ahead of COP27. 19 May 2022. Ahram Online https://english.ahram.org.eg/NewsContent/1/2/466533/Egypt/Society/Egypt-launches-National-Strategy-for-Climate-Chang.aspx (Accessed 6 September 2022).
[15] Arab Republic of Egypt Ministry of Environment (2022). Egypt National Climate Change Strategy (NCCS) 2050. https://www.eeaa.gov.eg/portals/0/eeaaReports/N-CC/EgyptNSCC-2050-Summary-En.pdf (Accessed 6 May 2022).
[16] Smith, J., Deck, L., McCarl, B., Kirshen, P., Malley, J and Abdabo, M. (2013). Potential Impacts of Climate Change on the Egyptian Economy. https://www.eeaa.gov.eg/portals/0/eeaaReports/CCRMP/6.%20Potential%20Impact%20of%20Climate%20Change%20on%20the%20Egyptian%20Economy/Potential%20Impact%20of%20CC%20on%20the%20Egyptian%20Economy%20English.pdf (Accessed 6 September 2022).
Access to Finance
Access to housing finance in Egypt is considered a major problem for many reasons including low incomes and a low financial inclusion rate. Only 36.8 million Egyptians hold bank accounts, including 16 million women.[1] The CBE provides facilities including mortgage finance initiatives and regularly revises its regulations to support different income levels. For example, to facilitate financing to “middle income” people, on 31 May 2022, the CBE added a new item to the mortgage finance initiative issued in December 2019. The initiative allocated E£50 billion (US$2.7 billion) for mortgage finance for single people with a maximum monthly income of E£40 000 (US$2 127) and families with a maximum monthly income of E£50 000 (US$2 659), with an interest rate of 8%. The amendment indicates that “the finance under this initiative will include the maintenance deposit with a maximum of 10% of the unit price”.[2]
In October 2021, the CBE modified the initiative’s conditions to be more inclusive. The modifications included increasing the maximum price for units to E£2.5 million (US$132 978) instead of E£2.25 million (US$119 669) and canceled the condition that limits the maximum net size of the unit to 150 square meters. It also increased the maximum finance term to 25 years rather than 20 years. In addition, it amended what was needed to fulfil the conditions, guarantees and documents to complete the mortgage procedures before allowing the financing to be used; now the financier may accept whatever other guarantees he deems appropriate, subject to the controls set by the Financial Supervisory Authority.[3]
The number of mortgage finance institutions in Egypt reached 28 in 2022, of which 18 are banks.[4] During the first half of 2022 the Mortgage Finance Fund signed 5 540 mortgage finance contracts with a total value of E£7.3 billion (US$388 million) compared to E£3.1 billion (US$165 million) over the same period the previous year. During the same period, the mortgage refinance value decreased by 23.6% to E£745.5 million (US$39.7 million). In June 2022, the number of signed mortgage finance contracts increased by 53.7% to 1 377 contracts, with a total value of E£2 billion (US$106.4 million), compared to E£754 million (US$40.1 million) signed in June 2021. During the same period, the amount of mortgage finance provided to households with a maximum monthly income of E£2 5oo (US$133) decreased by 35.4% to E£46.6 billion (US$2.5 billion) for 273 contracts compared to 432 contracts over the same period in the previous year. In contrast, the number of contracts signed by those with a monthly income range of E£2,500- E£3 500 (US$133-US$186) dramatically increased by 73.3% to 480 contracts with a total value of E£85.7 million (US$4.6 million), compared to E£44.4 million (US$2.4 million).[5] By the end of March 2022, the number of companies participating in microfinancing activity increased to 1 026 with 2 418 branches. By the end of June 2022, microfinance companies had granted E£32.95 billion (US$1.8 billion) to 3.8 million customers.[6]
[1] State Information Service (2022). CBE: 36.8 million citizens, including 16 million women, have bank accounts. 26 April 2022. https://www.sis.gov.eg/Story/165516/CBE-36.8-million-citizens%2C-including-16-million-women%2C-have-bank-accounts?lang=en-us (Accessed 4 October 2022).
[2] Central Bank of Egypt (2022). Circular dated 5 June 2022 regarding adding the maintenance deposit finance to the 8 percent mortgage initiative for middle income. 5 June 2022. https://www.cbe.org.eg/en/Pages/HighlightsPages/Regarding-adding-the-maintenance-deposit-finance-to-the-8-percent-mortgage-initiative-for-middle-income.aspx (Accessed 19 August 2022).
[3] Central Bank of Egypt (2021). Circular dated 4 October 2021 regarding amending the mortgage finance initiative for middle income (interest rate 8%). 4 October 2021. https://www.cbe.org.eg/en/Pages/HighlightsPages/Regarding-amending-the-mortgage-finance-initiative-for-middle-income-interest-rate-8-percent.aspx (Accessed 15 August 2022).
[4] Al Masri, H. (2022). Real Estates finance 2022: Publishing the list of banks and companies participating in the 3% and 8% finance initiative. 6 May 2022. Albayt News. https://albayt.news/2774/ (Accessed 20 August 2022).
[5] Financial Regulatory Authority (2022). Monthly performance report for non-banking financial activities. June 2022. Arab Republic of Egypt – https://fra.gov.eg/wp-content/uploads/2022/08/Monthly-Data-June2022-2.pdf (Accessed 26 August 2022).
[6] Arab Republic of Egypt (2022). Quarter 1 report for 2022. – Financial Regulatory Authority. March 2022. https://fra.gov.eg/wp-content/uploads/2022/06/%D8%A7%D9%84%D8%B1%D8%A8%D8%B9-%D8%A7%D9%84%D8%A3%D9%88%D9%84-2022.pdf (Accessed 24 August 2022).
Affordability
Finding affordable housing units is a problem for low and middle income people in Egypt. To address this, the government has introduced different mortgage finance initiatives and facilities and continues to provide social housing units for low and middle income people at lower prices with an installment term of up to 30 years.
The unemployment rate decreased to 7.2% during the first quarter of 2022 compared to 7.9% over the same period last year. In the urban areas it decreased to 10.5% from 11.1% last year. Within the rural areas it was 4.5% during the first quarter of 2022 compared to 4.4% last year. However, unemployment among male youth rose to 11.3% compared to 9.5% last year, and among female youth it increased from 32.5% to 40.4%.[1]
There have been some efforts to improve affordability for Egyptians. In January 2022, a presidential directive was issued to increase the public-sector minimum wage to E£2 700 (US$143.60) a month. This is the third time since January 2020 that minimum wage has increased. Initially it increased from E£1 200 (US$63.82) to E£2 000 (US$106.37) a month, then again in March 2021 it increased to E£2 400 (US$127.65).[2]
To increase the number of beneficiaries of mortgage finance initiatives, the Council of Ministers announced new adjustments to the maximum prices for housing. It also approved increases in the maximum monthly income categories that allow people to reserve housing units in a housing programme. For low income people, the maximum income became E£6 000 (US$ 319) for singles instead of E£4 500 (US$239) and E£8 000 (US$425) for married couples instead of E£6 000 (US$319). For middle income people, it became E£13 000 (US$691) instead of E£10 000 (US$532) for singles and E£18 000 (US$957.35) instead of E£14 000 (US$744.6) for married couples. These changes apply to the 3% interest rate initiative, which is an initiative available to low and middle income citizens for fully-finished and ready-to-move-in housing units across Egypt, including the new cities and new urban communities. The value of the financing reaches 85% of the property value for middle income, and 90% for low income citizens, for up to 30 years.[3] The maximum unit price for low income housing ranges between E£400 000 (US$21 274) and E£450 000 (US$23 936) instead of E£350 000 (US$18 615). For the fully finished units, the maximum price is E£1.7 million (US$90 416) and this applied for the 3% initiative.[4]
Furthermore, there is an 8% interest rate initiative by the CBE which is also available to middle income citizens for fully-finished and ready-to-move-in housing units across Egypt. It sets the value of financing up to 80% for up to 25 years, for people with a maximum income of E£40 000 (US$2 128) for singles and E£ 50,000 (US$ 2,660) for married couples.[5] For middle income, the maximum unit price is E£1.1 million (US$58 505) and the maximum unit price for the fully finished unit is E£2.5 million (US$132 978).[6]
To facilitate affordable finance opportunities to lower income people, Habitat for Humanity Egypt created a microfinance model for housing finance purposes in cooperation with national non-governmental organisations. Since its beginning in 1989, the programme has provided access to affordable housing finance to more than 45 000 low-income citizens across Egypt.[7]
[1] Central Agency for Public Mobilization and Statistics (2022). Monthly Bulletin July 2022. https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5107&Year=23518 (Accessed 24 August 2022).
[2] Sky News Arabia (2022). Egypt intends to raise the minimum wage for private sector employees. 18 May 2022. https://www.skynewsarabia.com/business/1523275- (Accessed 25 August 2022).
[3] Nasser, M.A. (2022). The barriers of the current projects. Have the prices of social housing apartments and housing for all Egyptians increased? 26 July 2022. https://www.masrawy.com/news/news_egypt/details/2022/7/26/2264640/ (Accessed 26 August 2022).
[4] Nasser, M.A. (2022). The barriers of the current projects. Have the prices of social housing apartments and housing for all Egyptians increased? 26 July 2022. https://www.masrawy.com/news/news_egypt/details/2022/7/26/2264640/ (Accessed 26 August 2022).
[5] Nasser, M.A. (2022). The barriers of the current projects. Have the prices of social housing apartments and housing for all Egyptians increased? 26 July 2022. https://www.masrawy.com/news/news_egypt/details/2022/7/26/2264640/ (Accessed 26 August 2022).
[6] Nasser, M.A. (2022). The barriers of the current projects. Have the prices of social housing apartments and housing for all Egyptians increased? 26 July 2022. https://www.masrawy.com/news/news_egypt/details/2022/7/26/2264640/ (Accessed 26 August 2022).
[7] Fares, R. and Ashoub, S. (2022). Offering Affordable Housing in Egypt Through Microfinance. 26 July 2022. Urbanet. https://www.urbanet.info/affordable-housing-egypt-microfinance/ (Accessed 26 August 2022).
Housing Supply
The housing market in Egypt suffers from a shortage of low income housing units. To address this, the government has responded in several ways including upgrading slum areas, developing the capitals of the governorates, and launching the Haya Karima[1] project to develop the neediest villages in Egypt. The government has especially been focused on developing and eliminating slum areas. Some slums and shanty towns are being removed or rebuilt, and residents are being rehoused in new units.[2] The government is also working on access to basic facilities in unplanned urban areas, such as electricity, potable water and sanitation, as well as paving the roads.[3] So far, it has developed 322 slum areas (unsafe[4] and unplanned ) out of 357 with a total cost of E£63 billion (US$3.4 billion. [5]
The total number of housing units provided by the public and private sector during 2020/2021 increased sharply by 73.1% to 336 300 units for a total cost of E£150 billion (US$8 billion) compared to 194 200 units in 2019/2020 for a total cost of E£79 billion (US$4.2 billion). These were economic housing units that target young people and low income people (have an area of 90m2 with three rooms) and comprised 169 100 units (50.3% of the total built units), followed by average housing which targets middle income citizens (areas between 100 m2 and 150 m2 with of three rooms) with 123 700 units (36.8% of the total), then the above-average housing with 17 100 units and luxurious housing with 26 300 units. .
The private sector built 169 800 units representing 50.5% of the total built units. The government, public and public sector have provided 166 500 units, which represents 49.5% of the total, compared to 85 000 units in 2019/2020.[6]
For social housing projects, 453 600 units were constructed under the One Million units project, of which 78 400 units were released in 2020/2021. With the Dar Masr Housing project (average housing), 37 700 units were built of which 9 000 were released in 2020/2021. Also, 37 900 units were provided under the Skn Masr project with 32 700 units in 2020/2021. In the New Administrative Capital, New Mansoura, and New Alamein, 3 921 units were provided with a total cost of E£25 million (US$1.33 million).[7]
The real estate sector is facing a challenge due to the increase in the price of building materials and inflation. The average sale price of iron reached E£20 200 (US$1 100) per ton in June 2022 with an increase of 35% compared to June 2021. The average sale price of packed cement (per 50kg) reached E£73.6 (US$3.9) in June 2022, an increase of 54.4% compared to June 2021.[8] Contractors had to raise the price of their units, which led to a decrease in their sales by 20% over two months in the first quarter of 2022.[9]
[1] “Haya Karima” which means “dignified” or “decent” life, is a national initiative that aims to provide decent housing for those most in need, such as by upgrading homes (e.g. by adding roofs), building housing complexes in poor villages, and extending water connections, sanitation, gas and electricity to informal settlements.
[2] Egypt Today (2022). Egypt to be declared slum-free in 2 months: official. 18 May 2021. https://www.egypttoday.com/Article/1/104020/Egypt-to-be-declared-slum-free-in-2-months-official (Accessed 6 September 2022).
[3] Fayez, W. (2022). Details of the Ahalina 1 and 2 project to accommodate slum dwellers. 1 Febuary 2022. El Watan. https://www.elwatannews.com/news/details/5929666 (Accessed 5 September 2022).
[4] Farid, S. (2019) Can Egypt’s slums be replaced by ‘safe zones’? 19 March 2019. Alarabiya News. https://english.alarabiya.net/features/2019/03/31/Can-Egypt-s-slums-be-replaced-by-safe-zones- (Accessed 4 October 2022).
[5] Amin, A. (2022). Planning: 63 billion pounds, the cost of developing 322 unsafe areas. 16 July 2022. Youm 7. https://www.youm7.com/story/2022/7/16/7 (Accessed 15 August 2022).
[6] Central Agency for Public Mobilisation and Statistics (2022). Bulletin of housing in Egypt 2020/2021. June 2022. https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&Year=23415 (Accessed 26 August 2022).
[7] Central Agency for Public Mobilisation and Statistics (2022). Bulletin of housing in Egypt 2020/2021. June 2022. https://www.capmas.gov.eg/Pages/Publications.aspx?page_id=5104&Year=23415 (Accessed 26 August 2022).
[8] Central Agency for Public Mobilisation and Statistics (2022). Monthly bulletin of average retail prices of major important building materials. September 2022. https://www.capmas.gov.eg/Pages/Publications.aspx?pageid=5107&YearID=23519 (Accessed 20 August 2022).
[9] Yahya, M. (2021). Roundup: Price rise in building materials puts Egypt’s real estate sector under pressure. 21 AprIL 2022. Xinhuanet. https://english.news.cn/africa/20220421/c72ff058c20340d4b892f356f423da3e/c.html (Accessed 21 September 2022).
Property Markets
The real estate sector in Egypt is suffering from various challenges including the shortage of some imported products due to importation barriers and the increasing prices of building materials.
Investment spending directed to the housing sector has increased substantially over the past eight years by 508% to E£614 billion (US$32.66 billion) compared to the period 2006/2007 and 2013/2014. In 2021/22, the annual public investment to the sector has increased by 847% to E£180 billion (US$9.6 billion) from E£19 billion (US$1 billion) in 2013/14. Furthermore, in the 2022/23 budget, the government plans to invest E£294 billion (US$15.6 billion) to implement various initiatives, of which E£33 billion (US$ 1.8 billion) is dedicated to the housing and construction sector, E£26 billion (US$ 1.4 billion) to the water sector and E£77 billion (US$ 4.1 billion) for sanitation services.[1]
The implemented investments in the housing sector include the national housing programme, for which 593 000 units were completed at a cost of E£120 billion (US$6.4 billion) and benefited more than two million citizens. In addition, they include the development of slums and unsafe areas,[2] where 322 out of 357 unsafe areas in 25 governorates were developed, benefiting approximately 1.2 million citizens. Also, 58 unplanned areas have been developed serving approximately 460 000 families, and 90 areas are being developed at present. The development of “fourth-generation cities”,[3] has reached 30 new cities with a total area of 580 000 acres, and a target population of approximately 30 million people. In 2020, for a business to register property in Egypt required 76 days and nine procedures, with a cost of 1.1% of the value of the property.[4]
[1] Amin, A. (2022). Planning reviews efforts to improve the standard of living of citizens in the field of housing sector services. 30 June 2022. Youm 7. https://www.youm7.com/story/2022/6/30/ (Accessed 25 August 2022).
[2]Khalifa, M.A. (2011). Redefining slums in Egypt: Unplanned versus unsafe areas. 1 Jan 2011. Science Direct. https://www.sciencedirect.com/science/article/abs/pii/S019739751000024X (Accessed 4 October 2022)
[3] Ghanem, S. (2018). New 4th Generation Cities: The New Map of Egypt. 26 Dec 2018. Invest-Gate. https://invest-gate.me/features/new-4th-generation-cities-the-new-map-of-egypt/ (Accessed 4 October 2022).
[4] World Bank (2020). Doing Business 2020. https://archive.doingbusiness.org/content/dam/doingBusiness/country/e/egypt/EGY.pdf (Accessed 29 August 2022).
Policy and Legislation
In March 2021, President Abdel Fattah El-Sisi ordered postponing the enforcement of the Real Estate Registration Law no. 186 2020, that imposes new property registration fees at the Real Estate authority until 30 June 2023. This will allow parliament to suggest some new proposals like detaching real estate tax payments from registration procedures and providing facilities for property registration. These measures will hopefully increase the number of registered properties in the country, as currently 95% of Egyptian property is unregistered.
In August 2021, the Financial Regulatory Authority (FRA) approved Egypt’s first microfinance leasing licence in the market. The licence allows offering the first microfinance product in the national economy. In October 2020 a new legislative amendment was issued according to law No. 201 of 2020 on the regulation of medium, small and micro enterprise financing. The amendments include increasing the maximum amount granted to each microfinance project to E£200 000 (US$12 740). This will increase financial inclusion rates for productive and craft activities.
[1] “Global Property Guide. (2020). Egypt housing market remains depressed. 25 June 2020. https://www.globalpropertyguide.com/news-egypts-housing-market-remains-depressed-4061. (Accessed 23 August 2020).
[2] PwC (2020). Egypt: New set of laws to regulate recent COVID-19 tax measures and amend the income tax, real estate tax and the social insurance laws. 20 May 2020.
https://www.pwc.com/m1/en/services/tax/me-tax-legal-news/2020/egypt-new-set-laws-regulate-recent-COVID-19-tax-measures-amend-income-real-estate-social-insurance.html (Accessed 23 August 2020).
[3] Invest Gate (2020). Gov’t Imposes 6-Month Ban on Building Permits. 1 June 2020. https://invest-gate.me/news/govt-imposes-6-month-ban-on-building-permits/ (Accessed 23 August 2020).
[4] Ahramonline (2020). Egypt demolishes thousands of illegal buildings in 3 months. 9 July 2020. http://english.ahram.org.eg/NewsContent/1/64/374066/Egypt/Politics-/Egypt-demolishes-tens-of-thousands-of-illegal-buil.aspx (Accessed 18 August 2020).
[5] The Arab Weekly (2020). Egypt launches microfinance incentives to contain informal economy.12 January 2020. https://thearabweekly.com/egypt-launches-microfinance-incentives-contain-informal-economy (Accessed 23 August 2020)
[6] Global Property Guide (2020). Tax on property income in Egypt. 8 May 2020. https://www.globalpropertyguide.com/Middle-East/Egypt/Taxes-and-Costs (Accessed 23 August 2020).
Opportunities
The real-estate sector is suffering from a lack of financial liquidity in addition to the increased cost of building. According to the chairperson of Hometown Developments, Diaa El-Din Farag, the sector needs a different model to deal with the sector’s problems, such as having partnerships between banks and developers, as well as facilitating the payment process for customers to make it easier for them to buy and pay.
The cabinet has set new regulations to protect the buyers. This requires the developers to provide semi and annual reports on their projects. It also requires the companies to have separate bank accounts for each project and made it a legal requirement for auditors to monitor each developer.[1] According to the president of the Beta Egypt company, providing guarantees to buyers will enhance the sector’s growth and the strength of the market. The CEO of Saudi Egyptian Developers is optimistic about the real-estate market in Egypt due to its weight in the Arab region.[2]
Despite the different initiatives launched by the state, both sides of the market did not benefit as much as was intended due to banks’ restrictions on companies and citizens.[3]
[1] Enterprise (2022). Real estate developers face tougher regulations + Europe could turn to coal instead of Russian gas. 20 June 2022. https://enterprise.press/stories/2022/06/20/this-evening-real-estate-developers-face-tougher-regulations-europe-could-turn-to-coal-instead-of-russian-gas-74236/ (Accessed 4 October 2022)
[2] Al-Aees, S. (2022). Real estate developers believe Egypt’s property market capable of absorbing shocks. 22 Jun 2022. Daily News Egypt. https://dailynewsegypt.com/2022/06/22/real-estate-developers-believe-egypts-property-market-capable-of-absorbing-shocks/ (Accessed 28 August 2022).
[3] Hassan, A. (2022). Real estate finance password. 14 April 2022. Youm 7. https://www.youm7.com/story/2022/4/14/ (Accessed 29 August 2022).
ker real estate project development. https://dailynewsegypt.com/2020/05/14/housing-ministry-to-facilitate-quicker-real-estate-project-development/ (Accessed 22 August 2020).
[2] Darwish, M. (2020). Plan to attract more Arab, foreign investments in Egypt real estate sector. 28 January 2020. https://dailynewsegypt.com/2020/01/28/plan-to-attract-more-arab-foreign-investments-in-egypt-real-estate-sector/. (Accessed 15 September 2020).
[3] Propertyfinder (2020). Breaking Down Egypt’s Real Estate Market in 2020. 27 April 2020. https://www.propertyfinder.eg/blog/en/breakegypts-real-estate-market-in-2020/ (Accessed 24 August 2020).
[4] Invest-Gate (2020). Real Estate Development Chamber Reviews 2020 Plans. 26 January 2020. https://invest-gate.me/news/real-estate-development-chamber-reviews-2020-plans/ (Accessed 18 August 2020).
Availability of Data on Housing Finance
In Egypt, the main source for macroeconomic data is the Central Bank of Egypt, which provides data related to GDP, balance of payments, investments, and monetary sector data. The Ministry of Finance is responsible for budget sector data and releases a monthly bulletin.
With statistical data, some can be found on the Central Agency for Public Mobilization and Statistics (CAPMAS) website related to the census report, a monthly information bulletin, and the annual Housing Report. The Housing Report includes data on the number of housing units built yearly and the kind of housing – government-funded or through private investments. CAPMAS also publishes a monthly bulletin with information on building material prices.
Data related to mortgage and microfinance can be found on the Financial Regulatory Authority website. There is a shortage of data on loans for construction and building purposes. There is no data published on housing resale or building costs.
Green Applications for Affordable Housing
In August 2022, a national plan was established to diversify the sources of energy required for development programmes, including the use of green hydrogen. The strategy targets increasing the country’s electricity generation capacity from renewable energy to 42% of the country’s electricity by 2035. President Sisi also directed to prioritise green hydrogen projects and stressed the importance of adding it to the integrated energy system in partnership with the private sector.[1] On 25 August 2022, the prime minister signed seven memorandums of understanding (MoUs) to establish industrial complexes in the Ain Sokhna Industrial Zone for producing green hydrogen.[2]
In fourth generation cities, the government aims to make them green cities by applying sustainability standards and waste recycling, as well as making them smart cities. In these cities, each citizen’s share of green and open areas will supposedly exceed 15m2.[3] The Talaat Mostafa Group has started building Egypt’s first green city – Noor City –- across from the New Administrative Capital.
In 2022, thermal power plants produced 80% of total electricity in Egypt, while renewable energy generated 20%, of which wind’s share is 12%, hydro’s share is 6%, and solar’s share is 2%.[4] Since 2016, 100% of Egyptians have access to electricity.[5] In 2014, approximately 91% of Egyptians had access to water in their homes,[6] and by 2020, 100% of Egypt’s urban population had access to basic sanitation services.[7]
[1] Zawya (2022). El-Sisi follows up Egypt’s sustainable energy strategy. 9 August 2022. https://www.zawya.com/en/projects/industry/el-sisi-follows-up-egypts-sustainable-energy-strategy-ovmrd9tc (Accessed 29 August 2022).
[2] State Information Service (2022). President Sisi directs to give priority to green hydrogen projects. 25 August 2022. https://www.sis.gov.eg/Story/170888/President-Sisi-directs-to-give-priority-to-green-hydrogen-projects?lang=en-us (Accessed 29 August 2022).
[3] Hassan, A. (2021). Fourth-generation cities in Upper Egypt are a real breakthrough. 22 December 2021. Youm 7. https://www.youm7.com/story/2021/12/22/2 (Accessed 29 August 2022).
[4] Ministry of Electricity and Renewable Energy (2022). Renewable Energy Targets. New and Renewable Energy Authority http://nrea.gov.eg/test/en/About/Strategy (Accessed on August 2022).
[5] World Bank (2020). Data. Access to electricity (% of population) – Egypt, Arab Republic. https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=EG (Accessed 29 August 2022).
[6] UNICEF (2017). Water, Sanitation and Hygiene. https://www.unicef.org/egypt/water-sanitation-and-hygiene (Accessed 29 August 2022).
[7] World Bank (2020). Data. People using at least basic sanitation services, urban (% of urban population) – Egypt, Arab Republic. https://data.worldbank.org/indicator/SH.STA.BASS.UR.ZS?locations=EG (Accessed 29 August 2022).
Websites
The Central Bank of Egypt www.cbe.org.eg
The Central Agency for Public Mobilisation and Statistics www.capmas.gov.eg
Invest Gate www.invest-gate.me
Egypt Today www.Egypttoday.com
Daily News Egypt www.dailynewsegypt.com
Financial Regulatory Authority. http://www.fra.gov.eg/jtags/efsa_en/index_en.jsp
The Egyptian Ministry of Finance www.mof.gov.eg
Global Property Guide. https://www.globalpropertyguide.com/
Ahram Online http://english.ahram.org.eg
Egypt Property Law http://www.egypt-property-law.com
Doing Business www.doingbusiness .org
Enterprise Press https://enterprise.press/
ALmasry aLyoum https://www.almasryalyoum.com/
