Despite the recent challenges facing the Egyptian real-estate sector due to unstable exchange rates and a rising dollar, real-estate investment nevertheless remains secure and attractive given the high rates of return and the increasing demand for housing units, Mamdouh Badreddin, director of the real-estate investment division at the Federation of Egyptian Chambers of Commerce, said in an interview with Al-Ahram Weekly this week. He said there would likely be increasing demand for real estate, whether for residence or investment purposes, as exchange rates remain unstable, inflation is increasing, and clients are looking for a safe place to put their money. The declining value of the pound could lead foreign investors to invest in Egyptian real estate due to its low price relative to competing markets, he said, especially as the return on Egyptian property investment is higher than in many other Arab or European countries. New attractive projects and land would be made available to the private sector, he said, including land in the new administrative capital and new residential communities such as Alamein. He noted that attracting investment required selling land at low prices, especially in the first phase of a given project, and that this should be done for all land in the new cities in order to attract investment. He said there was difficulty in determining a fair price for land in the new administrative capital, as prices would vary depending on the stage of the project. But prices in the initial phases should be low enough to attract investors, he said. Badreddin said that the real-estate investment division at the Federation of Egyptian Chambers of Commerce was seeking to devise solutions to problems facing the real-estate market, including by drafting a development law in concert with the Businessmen's Association and property developers. A draft had been presented to the minister of housing and it is expected to be put to parliament for adoption soon, he said. The adoption of the new law and the establishment of a property developers' federation would help to regulate the market, offer opportunities to companies to expand further, and pump in additional investment, while filtering non-committed firms out of the market. The new federation would be the sole body responsible for those working in the real-estate market, he said. The real-estate investment division had worked to provide investment opportunities that allow real-estate companies to take advantage of developing sources of energy and the available labour, Badreddin said. It had submitted an initiative to the Ministry of Housing to build low- and medium-cost residential units last year and had recently received approval from Minister Mustafa Madbouli to go ahead with the initiative and offer opportunities to the private sector to build social housing units in exchange for land for investment projects. Badreddin said the ministry's approval would benefit the sector by meeting the needs of a large segment of clients, increasing the supply of housing units, meeting demand, and regulating the price of housing units. It would also provide more jobs for workers in the sector. The state would benefit by receiving units that were ready to meet the needs of limited-income groups without bearing the construction costs. The private sector would benefit by obtaining land to build units for middle-income clients and would pump investment into the sector and address the crisis of the rising cost and scarcity of available land that is limiting the ability of many companies to carry out new projects.
