After Putin summit, Trump says peace deal is best way to end Ukraine war    Schneider Electric Expands Youth Partnership with Enactus to Drive Inclusive Energy Transition in Egypt    China's Jiangsu Zhengyong to build $85m factory in Egypt's Ain Sokhna: SCZONE    Egyptian pound ticks up vs. US dollar at Thursday's close    Egypt condemns Israeli plan to build 3,400 settler homes in West Bank    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Egypt, Namibia explore closer pharmaceutical cooperation    Egypt, China ink $1bn agreement for Sailun tire plant in SCZONE    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egypt's Electricity Minister discusses progress on Greece power link    Egypt's FM discusses Gaza, bilateral ties in calls with Saudi, South African counterparts    Egypt prepares to tackle seasonal air pollution in Nile Delta    27 Western countries issue joint call for unimpeded aid access to Gaza    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egyptian, Ugandan Presidents open business forum to boost trade    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt, Colombia discuss medical support for Palestinians injured in Gaza    Egypt, Huawei explore healthcare digital transformation cooperation    Global matcha market to surpass $7bn by 2030: Nutrition expert    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt's govt. issues licensing controls for used cooking oil activities    Egypt to inaugurate Grand Egyptian Museum on 1 November    Egypt, Uganda strengthen water cooperation, address Nile governance    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Korean Cultural Centre in Cairo launches folk painting workshop    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Mortgage market targets LE 10 bln by 2013
Published in Daily News Egypt on 03 - 02 - 2010

CAIRO: If the Mortgage Finance Fund can reach their goal, Egypt's mortgage market will jump from LE 4 billion to LE 10 billion in the next three years, MENA reported.
Iman Ismail, managing director and CEO of the Egyptian Mortgage Refinance Company, the first mortgage liquidity company in Egypt, affirmed that the target of LE 10 billion "not unreasonable.
She included the caveat, however, that more efficient mortgage finance procedures must be signed into law, adding that simplified legislation has been approved by the cabinet and will be submitted to parliament this year.
"Currently, the [mortgage finance] process takes six months and seven steps. We want it to go down to less than a month and three steps, she explained.
As yet, mortgages represent only 1 percent of Egypt's GDP, as compared to 50 percent in Cyprus and 80 percent in the UK, according to Reuters.
Aside from complicated registration procedures, the market is relatively immature. The Mortgage Finance Authority (MFA) was established in 2001 to implement Law 148/2001 and regulate mortgage finance and licensing. The intervening decade has seen some development, including the lowering of registration fees in 2003 and 2004. In 2009 the Egyptian Financial Services Authority (EFSA) took over mortgage regulation from the Mortgage Finance Authority.
Bureaucratic juggling aside, Ismail believes part of the hindrance is that the possibility of obtaining a mortgage is not well known nor understood by most Egyptians. She believes public information campaigns would be useful in order to inform people that owning property - currently only 30 percent of the population - is a greater possibility than before.
Ismail explains that the new property tax, while billing only the highest echelons of society, helps to increase awareness of registering property, a necessary step in building a mortgage-friendly culture.
Furthermore, some Egyptians oppose the practice of charging interest on mortgages un-Islamic. Sharia compliant home finance offered by the likes of a Talaat Moustatfa Group subsidiary circumvent this concern.
The lack of mortgage finance in bank balance sheets has also stunted the growth of the mortgage market, although Ismail sees this as an opportunity.
When it became clear that an over leveraged secondary mortgage market in the US and UK acted as a catalyst in the financial crisis and subsequent global economic slowdown, many in Egypt heaved a sigh of relief that Egypt's mortgage market had not yet reached a level of complexity that might have exposed it to the same problems.
Ismail, however, offers assurance that even once the Egyptian mortgage market reaches maturity, and develops a secondary mortgage market in which banks sell the mortgages they hold, Egyptian mortgages will not expose the financial sector to similar risk.
"The issue [of anxiety] is a lack of understanding. The financial crisis. was not the result of mortgage finance. It was the result of arrangements that made no sense. .Liar mortgages, or mortgages available in the US that do not require the applicant to state or provide proof of their earnings. Mortgages leveraged at more than 100 percent, then rated triple A by a bank. [In Egypt] there are very strict rules. Banks aren't allowed to issue mortgages unless it will constitute less than 40 percent of [the applicant's] income, they require satisfactory documentation of income.. You can't even make comparisons.
With Egypt's swelling population and very real demand for housing, the Egyptian real estate market is looking more attractive to regional investors burned by Dubai's artificially inflated real estate boom and December's near crash.
Although the future looks promising, Ismail warns, "mortgages will not solve the housing crisis. Although mortgage finance will bring more property within the reach of low and middle income populations, mortgage finance is not intended to address the needs of those who simply cannot afford housing.
"This is about affordability.what it does is allow an individual to leverage the cash they have. They could have afforded 'X', now they can afford 'X' times three. If you save well and have a regular income, you can benefit.
Ismail mentioned government programs designed for the poor. However, other than the low income housing developments currently underway from Orascom Housing and Palm Hills Development, which have received support from the Ministry of Housing, the government has yet to make significant efforts to end Egypt's housing crisis.


Clic here to read the story from its source.