Economy

Vice-Chairman of the Sustainable Development Committee for Egyptian Businessmen, the real estate developer, Dr. Ahmed El-Shennawy: The real estate sector is the safest and most value-preserving investment.. 17.25% certificates will not affect it at all

20221029 Ashraf Tawfiq

A state of anticipation and expectations of quiet sales and high unit prices)

Real Estate as a result of the liberalization of the exchange rate

Real estate financing and the diversity of mechanisms for offering land and partnership between the state and the private sector are the most important mechanisms to face the repercussions of recent decisions on the real estate sector.

Dr. Ahmed El-Shennawy, Vice-Chairman of the Sustainable Development Committee of the Egyptian Businessmen Association, stressed that the current economic conditions that the world is going through now and that Egypt is affected by, as a part of this world, necessitated a number of urgent measures to contain the successive economic crises. He pointed out that the liberalization of the exchange rate and the raising of bank interests and some other decisions announced by the government recently will affect the real estate sector, as it will affect many major economic sectors as a result of expectations of a rise in the prices of construction inputs during the coming period. Interest on deposits, and issuing bank certificates of more than 17.25% will not affect investment in the real estate sector for two main reasons, the first is the ratio and proportionality between the returns of these certificates in return for an increase of more than 20% in the value of the dollar against the pound, and the second reason is that the return on these certificates is annual and not monthly or Quarterly, which does not meet the individual’s ambition to invest in these certificates. Therefore, real estate remains the long-term investment, the safest and the most value-preserving.

Al-Shennawy indicated that the liberalization of the exchange rate will certainly affect the prices of building materials during the coming period, and therefore there will be an increase in the price of the property, but we will not be able to determine the percentage of the increase now, especially since the entire market is still in anticipation of the result of the recent economic decisions taken by the state, and will it continue? The dollar will rise during the coming period, or will it decline again, expecting that the current and last quarter of the current year will witness a rise of no less than 10% of the value of real estate units of all kinds, in addition to the impact of the sales movement in a calm manner, explaining that the problem is not in buying and selling, but in inflation after the liberation of exchange rate Will there be a new increase or not?

El-Shennawy said that there are a number of proposals and solutions that help the real estate sector and need from the state. A number of decisive decisions to bypass this stage, especially since the real estate sector is one of the important strategic economic sectors that contribute to the country’s gross domestic product and is able to attract hard currency and attract local and foreign investments as well, noting that the most important of these proposals is the existence of flexible real estate financing and approval of financing The units are under construction and a tripartite contract is made between the client, the bank and the developer, and there should be clear timetables and technical schedules for the projects under the supervision of the Urban Communities Authority on the implementation rates of these projects, in addition to the need for financing for real estate development companies with low interest and facilities in the procedures in order that these Companies resist market changes and complete their work in the field of development and contribute with the state in implementing new urban development plans.

El-Shinawy suggests That there should be homogeneity and balance between the mechanisms of land subtraction by the National Communities Authority construction and a multiplicity of methods of offering and selling lands to match the way companies sell to clients, pointing out that the development companies bear the burdens of implementing and selling the project in full without support and with payment facilities of up to 10 years and advances of up to 10%, while the company pays 25% of the total value of the land To the Authority of Communities, and the rest of the value of the land is paid in installments not exceeding 3 years, and therefore different ways must be considered to contain the crisis and the existence of various and different payment methods for longer repayment periods for the lands from 7 years to 10 years and advances not exceeding 10%.

20221029 El-Shennawy also called for an increase in land offerings in the system of partnerships with the private sector and cooperation with all categories of companies, whether small or medium, and that participations are not limited to large companies Which represents only 30% of the total number of companies operating in the sector to diversify the supply to meet the needs of all segments of society and support the entire sector, provided that a classification is made for each company according to its financial and technical ability. in kind for the project P, calling for the need for there to be institutions, financing and executive agencies, whether for individuals or companies, and work to provide decent housing units, fully finished, at an appropriate cost for all segments of society in order to achieve Egypt’s 2030 vision in its plan to achieve a new urban development. 20221029 and activating goal 17 of the sustainable development goals related to partnership contracts by supporting partnerships between the state and the private sector, as well as the state’s support for the private sector with a number of decisions and procedures that It helps him to implement major investment projects that support the local investor and attract more foreign investments so that the state, the economic sectors and the citizen achieve their goals in overcoming the current period and providing a better future for future generations.