Hometown Developments Chairman Diaa El-Din Farag said the real estate sector is facing some challenges, including rising prices of construction materials and shortages of some raw materials, due to low production and import difficulties. As a result, construction work has decreased. for more than two years.

During the 6th edition of the Think Commercial roundtable, titled “Egypt’s Real Estate Market: Mechanisms to Overcome the Global Economic Crisis”, on Tuesday, Farag pointed out that there are certain mechanisms which must be completely different from the existing ones in order to preserve the real estate sector and its companies in the current period.

He added that the industry is currently facing a new challenge, including a lack of financial liquidity and high costs that threaten the completion of projects that have been sold to customers.

He further pointed out that the sector needs a new model to deal with the current crisis, starting with the process of offering land to deliver a final move-ready product to customers. In addition to reconsidering land prices, which currently represent about 40% of the cost of construction, which is a very exaggerated percentage, so it should not exceed 20% of the total cost, as well as the reconsideration of payment terms.

He added that there are other models for sale other than the traditional method that we are used to, and there are many models that exist in the rest of the countries. For example, a bank can be a lead partner for a developer and finance the developer directly from day one after the developer prepares a feasibility study for their project and provides the appropriate required guarantees.

Real estate companies must design new tools and real estate products adapted to the financial solvency of customers that meet their requirements and their needs, as well as find recognized non-traditional financing. In addition to offering initiatives to facilitate the payment process for customers so that they can invest in real estate. In addition, creating non-traditional financing facilities, as well as offering initiatives to facilitate customer payment processes so that they can invest in real estate. In addition, banks should also start working on a decision of the Financial Regulatory Authority in financing customers for the purchase of units under construction, by working with this decision, the market will be strengthened,” Farag explained.

Chairman and co-founder of The Land Developers (TLD) Ahmed El Tayebi said controls regulating the local real estate sector allow serious businesses to develop new projects, protect consumers and help expand the economy. export of Egyptian real estate abroad.

El Tayebi added that serious developers are able to adapt to any changes in the real estate market, and we could see an increase in property prices in the coming period.

Country Director of JLL’s Egypt office, Ayman Sami, said Egypt has achieved high economic growth rates. “However, the real estate market has experienced great challenges, the sector has been able to overcome them.”

Sami pointed out that construction costs have been subject to successive increases following an increase in raw material prices of 18-20%, and prices have increased by 15-30%. In addition, some promoters are coping with the situation quickly, but the market is in a state of uncertainty, and some of them have stopped selling permanently, or have postponed the offer of new phases of projects.

Alaa Fikry, Chairman of Beta Egypt, said the controls recently approved by the Cabinet are necessary because they are in the interest of the buyer, and the market is the buyer, and providing guarantees to buyers strengthens growth and market strength.

Fikry added that there is part of the crisis that developers are bearing, due to the expansion of projects following the sale under construction, which is a misleading model. With the crises, the situation of the companies reveals itself, the promoters must turn to more precautions, and the success is not in the sale, but in the delivery according to precise dates.

Fikry said that all proposed projects are commensurate with purchasing power categories A, adding, “Due to high commodity prices and rising land prices, there are no projects that serve classes B and C, which make up about 90% of Egyptian society. .”

Hesham Helal, Founder and CEO of Criteria Design Group, said that the real estate sector is one of the most important economic sectors in Egypt, as it serves housing and tourism, and the sector is facing great challenges during of the current period, and architectural designers cannot isolate themselves from the sector and its challenges.

Helal added that architectural designers always look for the best and develop solutions to problems and challenges and do not mirror them but rather work to find solutions to them, and most of the challenges represent economic and investment challenges.

He explained: “If negative changes appear on real estate products as a reflection of bad political and economic conditions, chance appears and the design is a reflection of society and its conditions, but it must design solutions to the problems and to the challenges and not to express them. ”

He stressed the need for architectural design to contribute to the development of solutions to rapid social and economic changes, and architectural design must be compatible with buildings according to the changing needs and requirements of customer purchasing needs. .

Architectural designers should strive to create a sustainable, low-cost, low-operation product that is compatible with client needs using available natural resources such as ventilation and daylighting, he concluded.

Meanwhile, Saudi Egyptian Developers CEO Mohamed El-Taher said Saudi investments have a bullish view of Egyptian markets in various areas, including the real estate development sector, due to Saudi Arabia’s position and weight. Egypt in the Arab region.

El-Taher noted that recent decisions taken by the state are good and serious but their problem is timing, as the time is currently difficult and inappropriate, added that the market is experiencing particular challenges with interest rates and high inflation rates. In addition, some real estate development companies burn prices and, if they fail, distort the reputation of the market as a whole.

Gasser Bahgat, CEO of Madaar Development, said: “There is no solid alternative for businesses. If the companies sell the whole project, the whole project will be delivered, and it is better for the company not to sell the whole project, even if the demand is high. Many make this mistake. Whoever still owns part of the project given the current changes will manage to cover the costs and develop projects.

Bahgat explained that the obstacles to the activation of the mortgage financing system are represented in two axes, the first is the high interest rate, which represents a significant financial burden for the client, and the second axis is represented in the procedures in the event of default by the client and is unable to pay the installments.

During one of the sessions, Ashraf Ezz El-Din, Managing Director of Al-Futtaim Group Real Estate, said: “The Egyptian real estate sector has continued to demonstrate its stability while coping with the challenges that have arisen in all sectors. Coinciding with intensive efforts to improve market performance and create more investment opportunities.

Ezz El-Din said that the problem of price increases, including building material price spikes of up to 18% on average, and there are materials that have increased by 30% and others by 60 %, as a result, companies have increased property prices by 20% in two phases since last April and it is expected to increase it by another 10% in the coming period.

Ahmed Amin Massoud, Chairman of Menassat Developments, said the developer is taking care of the entire development cycle at its own cost, from buying and developing the land to financing the entire construction. of the project.

Massoud revealed that the new administrative capital needs more marketing for the projects it is in to get a true picture of the scale of development taking place there.

“If there is good publicity about the volume of work in the New Capital, it will attract large foreign investments in the coming period,” he concluded.

© 2022 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).


Qatar and Algeria embark on tourism and real estate investments - Doha News


BidMyListingⓇ Introduces the First Digital Marketplace for Real Estate Agents to Bid on Listing Opportunities

Check Also