ates Roundtable Discusses Egypt’s Real Estate Market Tools to Confront Running Economic Crises

Invest-GOpening its series of roundtables over 2023, Invest-Gate holds a roundtable, in collaboration with the Egyptian Businessmen’s Association (EBA), shedding light on recent global economic crises and how they affected the performance of Egypt’s real estate market. The roundtable takes place on January 31st, 2023 at 09:00 am in the Nile Ritz Carlton. Hosting prominent experts in the Egyptian real estate sector, the roundtable carries the title “Egypt’s Real Estate Market Vs. Economic Crises.”

The roundtable discusses the roles of the Egyptian government, developers, and the banking and contracting sectors in solving the crises facing the real estate sector.

Egypt’s real estate market saw several challenges in 2022, including increases in the prices of raw materials, the Russia-Ukraine war, spiking inflation, and the further depreciation of the local currency. Such factors have resulted in an increase in the price or even the non-availability of building materials, in addition to affecting people’s purchasing power. However, the sector managed to get over these crises with minimal losses, and proved its ability to overcome and confront all crises.

The roundtable is divided into two sessions, titled “Tools to Overcome Crises.” Both sessions are moderated by Fathallah Fawzy, Vice Chairman of the EBA and Chairman of the Real Estate Development and Contracting Committee.

The event is attended by a group of prominent real estate experts, including Khaled Abbas, Chairman and Managing Director of the Administrative Capital For Urban Development (ACUD), Waleed Abbas, Assistant Minister of Housing for the Affairs of the New Urban Communities Authority (NUCA), Sherif Hammouda, Chairman of GV Group, Tarek Shoukry, Chairperson of the Real Estate Development Industry Chamber and Deputy of the Housing Committee in the House of Representatives, Mohie Farag, Chairman of Upwyde Developments, Ahmed Mansour, CEO of cred, Omar El Tayebi, Chief Operating Officer of The Land Developers, Maha Abdel Razek, CEO of Misr Real Estate Assets Management , Ahmed Amin Massoud, Chairman of Menassat Developments, Mohamed Alsaidi, Partner and CEO of Infinity Phoenix, Omar Attaby, CEO of Attaby Consultancy, Mohamed Elwi, CEO of Housing & Development Properties (HDP), Mohamed Taher, Chairman of Nile Developments, Mohamed Galal, Chairman of TSM Asset Management Real Estate Development, Amad Almsaodi, CEO of Aqarmap, Mohamed Banany, Managing Director of Real Estate Domain (RED), Hisham Moussa, CEO of REDCON for Offices and Commercial Centres, Tarek Bahaa, CEO of MENA Real Estate Development Consultancy, Bedeir Rizk, CEO of PARAGON Developments, and Waleed Morsy, Chairman of DCI Plus Architects Office Consultant.

Over the course of the roundtable, real estate experts present and exchange their views on the economic crises that affected the market’s performance over the year, in addition to providing solutions to overcome these crises. They discuss the government’s role in offering solutions, including fixing building and construction materials’ prices for a period of time until completing the existing projects, fixing steel prices, and drafting laws to regulate the market, in addition to providing new facilities on mortgage finance to add more segments.

Real estate experts discuss developers’ role in terms of preparing market studies and feasibility studies dealing with the current economic crises, and developing plans to confront financing problems. This comes along with companies’ flexibility to deal with the running economic crises to support customers’ purchasing power, study the possibility of offering longer payment methods, and find solutions to overcome the fluctuation and stagnation in buying and selling processes.

During the event, experts also discuss the banking sector’s role to face the crises, including finding new financing solutions, whether for the developer or the customer, to support and revitalize the market, finding solutions to support developers in overcoming the currency devaluation, and launching new programs to boost the purchasing power.

Further, experts tackle the contracting sector’s role in terms of finding solutions to face the price increase of building materials, offering long-term payment methods for resale units, and finding creative solutions to overcome the recession that the resale market is experiencing.

Mohamed Fouad, Invest-Gate’s CEO & Managing Partner, says: “Over the last six years, Invest-Gate has been holding roundtables and key events to discuss recent developments in the real estate sector. In the context of the extraordinary conditions facing the sector due to the current economic crises, Invest-Gate gathered real estate experts to offer recommendations and untraditional solutions to surmount such crises.”

Fathallah Fawzy, Vice Chairman of the EBA and Chairman of the Real Estate Development and Contracting Committee, says: “The increase in inflation and rising construction materials prices are among key challenges facing the Egyptian real estate sector and have a negative impact on the market. Therefore, I call for considering and observing this crisis to come up with fundamental solutions for it, as real estate is the safe haven for investments.”

Khaled Abbas, Chairman and Managing Director of the Administrative Capital for Urban Development (ACUD), affirms: “There are challenges facing the real estate sector that require thinking of non-traditional solutions to overcome. Postponing the implementation of projects is not a solution to the crisis. Expenditures and costs must be controlled to meet the challenges. Also, the value of installments should be reduced for developers. [Local] expertise should be employed for the advancement of the sector. The market will witness filtering in the coming period. Deferring the payment of land installments will benefit developers. Sales of real estate companies increased by 30%-40% YoY during 2022.”

Tarek Shoukry, Chairperson of the Real Estate Development Industry Chamber and Deputy of the Housing Committee in the House of Representatives, says: “The current crises have a great impact on real estate developers, and the solutions must be more realistic. Mortgage finance has become a necessity in light of the significant rise in real estate prices to mitigate the burdens on customers and developers. [That should happen] by facilitating procedures, so that the unit becomes the guarantor. Postponing all installments without interest for companies for a period of 6 months or a year for all real estate projects is the simplest solution that can be taken now, which is the view of the government, represented by the Ministry of Housing. The chamber presented the companies’ demands and obtained approvals for many of them.”

Sherif Hammouda, Chairman of GV Group, states: “What the real estate sector is facing has exceeded the definition of the word ‘crisis’, and solutions cannot be only temporary. The cost of financing is high, and the House of Representatives must support developers to handle the situation, which may include compensating them for the differences in the exchange rate of the US dollar.”

Mohie Farag, Chairman of Upwyde Developments, expresses: “The government must support real estate developers significantly. The high exchange rate is the core of the problem. This could be solved through exporting real estate and attracting the dollar.”

Ahmed Mansour, CEO of cred, points out: “We do not have the luxury but solving the running crisis and confronting the main problems, including compensating developers, cutting interest rates, and covering the financing gap, in addition to offering more facilities when allocating new land plots.”

Omar El Tayebi, Chief Operating Officer of The Land Developers, explains: “Due to the current crisis, the developer has transformed from a person of vision and ideas into a financier facing major challenges, especially the change in the exchange rate. The contracting sector could secure affordable building materials. The resale market is suffering from stagnation, but mortgage finance would revive it.”

Maha Abdel Razek, CEO of Misr Real Estate Assets Management, affirms: “In order to address these crises, properties must be registered, and mortgage finance must be provided for all different real estate products. Market needs must be considered, and requirements for sustainability, green investment, and digitization should be taken into account.

Ahmed Amin Massoud, Chairman of Menassat Developments, says: “The real estate sector contributes more than 25% of Egypt’s GDP and provides about 3.5 million direct and indirect jobs. Real Estate Developers Law must be passed and there is a great need for a clear mechanism for land allocation under the Public-Private Partnership system with the New Urban Communities Authority (NUCA). The recent movement in the exchange rate could open new markets aborad.”

Mohamed Alsaidi, Partner and CEO of Infinity Phoenix, expresses: “Exporting the real estate is very important in various exhibitions to confront the crisis, as the change in the currency rate led to a state of eagerness to invest in Egypt. All parties must cooperate to create a platform that collects all data on public and private projects in Egypt.”

Omar Attaby, CEO of Attaby Consultancy, points out: “There is a must to raise the awareness among the government and individuals of the specifications and importance of building materials, which represents a major problem in the rising price of units’ cost. This, in turn, gives the funds to developers on the basis of applying sustainability in their projects.”

Mohamed Elwi, CEO of Housing & Development Properties (HDP), elaborates: “Shortening the project implementation period to speed up the capital cycle will contribute to resolving the current crisis. Mortgage finance is the fastest solution to the real estate crisis, and there are about 38 entities operating in mortgage finance in the Egyptian market. A committee must be formed to market Egyptian real estate abroad through the Ministries of Foreign Affairs and Investment, instead of relying on real estate marketers only. Also, a clear policy and a new vision should be adopted for real estate export that includes providing incentives for foreign investors.”

Mohamed Taher, Chairman of Nile Developments, states: “The ideal solution to the current crisis is real estate export. While property sales in Egypt recorded $18 bn during 2022, sales in Dubai surpassed that figure four times because it depends on foreign buyers.”

Mohamed Galal, Chairman of TSM Asset Management Real Estate Development, asserts: “Egypt does not face liquidity problem. This problem only exists on the companies’ level, not individuals. This could be solved by taking steps backward. Legally, as a developer, I have the right, under the current circumstances, to cancel the contracts held for sale.”

Amad Almsaodi, CEO of Aqarmap, says: “The 4–6-year installment plan exists only in Egypt; however, it reaches periods of over 20 and 30 years in different countries around the globe. Thus, there must be a way to change that situation with longer installment periods. Implementing mergers, reducing costs, and focusing on the GCC markets, especially the Saudi, will contribute to overcoming the current crisis.”

Mohamed Banany, Managing Director of Real Estate Domain (RED), explains: “As marketers, we do have an optimistic view of the current situation. Also, there is a must to change real estate marketers’ vision, come up with creative solutions, and provide data from developers to resolve the crisis.”

Hisham Moussa, CEO of REDCON for Offices and Commercial Centres, says: “Mortgage finance is a very important economic tool, and recommendations and proposals must be turned to reality in cooperation with government entities. Green financing is a very good alternative to traditional financing, and the application of sustainability is an integral part of the real estate system and real estate investment.”

Tarek Bahaa, CEO of MENA Real Estate Development Consultancy, mentions: “The coming period, will see the survival of the fittest which has strong financial solvency and professional staff. There is a need for real estate funds to solve the financing problem, in addition to regulation of the real estate brokerage market. It is also of great importance to market real estate projects abroad, under the auspice of the Ministry of Housing and major real estate companies.”

Bedeir Rizk, CEO of PARAGON Developments, states: “There are many changes in the real estate sector, as developers fight for survival. Thus, there must be solutions to preserve and restructure investments in existing projects.”

Waleed Morsy, Chairman of DCI Plus Architects Office Consultant, says: “There is a terrible exaggeration in codes in Egypt, unlike other countries. In this regard, the government needs to facilitate licensing procedures. The application of sustainability in its comprehensive and broad concept is the radical solution to the current crises.”

The roundtable is sponsored by GV Group, Upwyde Developments, cred, The Land Developers (TLD), Misr Real Estate Assets Management, Menassat Developments, The Icon Show, and Attaby Consultancy.

Our media partners include Aleqaria, Al Borsa News, Daily News Egypt, Aqarmap, Osoul Misr Magazine, Bloom Gate, El Gedaan Real Estate, Eleqtisade News, Elli Bana Masr Program, and Property Plus.