CAIRO: Fears of a real estate bubble bursting were slightly mollified when veteran real estate financiers and developers agreed that they envisioned an additional increase in prices. "I'm afraid to say that I see an increase in prices over the next three to four months because we are hearing about rises in the price of cement as well as other building materials, said Hisham Talaat, the chairman and managing director of Talaat Moustafa Group. Panelists at the real estate session on the second day of the Euromoney Egypt Conference debated the definition of a bubble and whether enough market research had been conducted to attribute the speedy rise in Egyptian real estate prices to a bubble phenomenon. "There needs to be more analysis on what a bubble is and whether or not this is a bubble, said Maher Maksoud, managing director of Sodic. The fundamental reason behind the surge in prices is a rise in real demand supported by higher purchasing power, according to Maksoud. "A bubble is defined as a trend where there is oversupply and I think that this is absolutely not the case, he said, adding that there is ample demand in areas outside the realm of luxury residential compounds, such as office buildings, retail and hotels. "Tourism in Egypt is booming and growing, it is limited only by the capacity available. There is huge demand for additional hotel units, conference centers, restaurants and sports facilities, Maksoud said. Another untapped market, panelists agreed, is the residential sector for the middle class, where mortgage finance would be an effective catalyst for growth. According to Mohamed Mahmoud El Etribi, general manager and board member of the Egyptian Arab Land Bank, the size of the Egyptian mortgage market is currently estimated to be around LE 1.4 billion. "We expect to it reach the LE 2 billion mark next year, El Etribi said. When compared to the US or UK, where the mature mortgage market represent nearly 80 percent of GDP, the Egyptian mortgage market is nascent, only estimated to constitute 1 percent of GDP.
