By Mohammed Ayyad and Ahmed El Adly The Central Bank of Egypt (CBE) will double to EGP 20bn the mortgage initiative proposed to banks in February, according to Minister of Housing, Utilities and Urban Development Mostafa Madbouly. He added that this increase will be implemented in 2015. Banks will receive a discount on the mortgage prices for the next 20 years so that they can later give loans back with deducted annual earnings at 7% for lower-income citizens. There will also be deducted annual earning at 8% for middle-income citizens, on condition that the banks use the money to buy units for the housing units in the new urban communities. Madbouly said that real estate activity is going through a crisis due to the lack of trained technical workers. He added that Arab investors want to enter the Egyptian market but fear that Egypt lacks professional technical workers who will help complete their projects. Madbouly's statements came during a meeting in the Canadian Chamber of Commerce, in the presence of the Minister of Housing and a number of real estate development companies. The Canadian Chamber of Commerce signed a new cooperation protocol with the Ministry of Housing, Utilities and Urban Development, offering training programmes to technicians and craftsmen using Canadian technology and expertise. Head of the Canadian Chamber of Commerce, Fayez Ezz El-Din, said that Canada is very interested in technical and professional training, and that it is prepared to cooperate with Egypt in this sector. Hussein Sabbour, the Chairman of Al-Ahly For Real Estate Development, said that construction costs in Egypt will not go down again because the prices are naturally affected by the removal of subsidies on oil product. He added that Egypt's real estate properties are of the lowest prices compared to neighbouring countries. Sabbour said that the only solution to face the crisis of price increases in real estate units is to increase Egyptian citizens' income, and this will not be achieved until worker productivity rises. He pointed out that middle-income Egyptians buy properties as a form of saving, while the low-income segments cannot buy units at high prices. He confirmed there is a significant demand for property in Egypt during the current period, whereby there is a shortage in the number of housing units, and that Egypt needs 500,000 units a year. As such, he believes that real estate investment will remain in demand for many years. Roiia Group Chairman Hesham Shokry recommended that the Ministry of Housing adopt a mechanism obliging real estate developers to allocate a number of units in a project for the benefit of the state. This will happen instead of their receiving cash payment for the price of the land. Shokry confirmed that this mechanism will serve low-income segments because the final touches of building units will be in line with the specifications of the development company. Moreover, Fathallah Fawzy, one of the real estate investors, said that the number of slum areas in Egypt is increasing, stating that the situation will get worse by 2050, when the number of Egyptian population is expected to reach 150 million.
