CAIRO: "The real estate market is one of the most important sectors in Egypt, said Ahmed El-Maghrabi, minister of Housing, Utilities and Urban Development. In his keynote speech at the Euromoney Egypt Housing and Real Estate Finance Conference on Monday, El-Maghrabi said real estate and construction have achieved a 15 percent growth rate in recent years, contributing to 8 percent of the nation's GDP. With the increase in demand for housing and commercial units, local and international investors have worked to capitalize on the current real estate boom, as the government turns its focus to increasing supply to meet this rising demand. In order to do this, the past year has witnessed an improvement in the legal housing framework. "Egypt finalized, and the parliament has approved, the new building law, once enacted in the next few months, it will put Egypt in a different status, El-Maghrabi said. The new law is expected to put an end to the lack of planning and mushrooming of new cities, which has been going on for decades. The government has also increased the supply of land. "Availability has been a problem, we have taken steps to improve the supply of land, to move real estate to a higher rate, he said. Egypt is also working on marketing the real estate sector, an approach that wasn't usually implemented in Egypt. "I am here to market real estate investments, we are seriously marketing Egypt, he said. Despite the already hefty demand for real estate, the government is keen on matching the increased supply with fresh demand. This will be done through aggressive efforts to build the mortgage finance market, which will make it more financially feasible for Egyptians to own homes. The lower income bracket was not neglected in these endeavors as steps are being made to bring investors into this uncharted territory. "Low cost housing was left only to government participation but now with the increase in population, needs for social housing have grown, he said. The private sector has committed to 100,000 units of low cost housing. "For the first time, we have a European investor and we are not just dependent on Egyptian and regional investors, he said. Strong demand and supply are important catalysts, but there are still challenges to be met. The first problem the sector is facing is the increase in the price of building materials. "This is a challenge the consumer must get used to because we cannot be isolated from international prices and the international community, he said. There is also a cultural barrier the real estate sector must face. The implementation of the modern real estate tax law should give people the incentive to shift their empty units and land to the market, hence increasing supply. "People will think twice before leaving units and land empty, hence hindering development, he said. "There is a strong social agenda to the tax law, it is not just a burden, he said.
