NUCA offered 12,000 feddans within a year: Housing Minister

The increase in land prices and interest rates are the main challenges facing the sector, says developers

Due to growing population that reached 95 million, the Ministry of Housing has offered lands for different community tranches to double the urban lands to meet the increases in population, according to Minister Mostafa Madbouly.
Madbouly said that New Urban Communities Authority (NUCA) offered 12,000 feddans within a year for the private sector, which is a big offering over the past years.
In Al Ahram Real Estate Investment conference held Monday, Madbouly noted that the government is obliged to provide lands that enable the absorption of population increase. Therefore, the government has provided units for all tranches of the community, especially low-income and middle-income, through ownership or rent systems.
Madbouly called the investors to diversify their project's areas and to launch projects in other areas besides Greater Cairo and new cities.
During the conference sessions, developers noted that the increase in land prices and interest rates are the main challenges facing the sector.
From his part, Al Ahly for Real Estate Development Chairperson Hussein Sabbour said that the difference in the cost of carrying out real estate projects after the flotation directly reached about 40%, in addition to the subsequent increases in the prices of fuel and partial energy subsidy cuts, which has a negative effect on the prices of real estate units and investment in the market.
Sabbour added that the government should reconsider its vision of considering land as a commodity that must be profitable, but a means of development.
Ashraf Dowidar, the CEO of ARDIC for Real Estate Development, noted that raw materials needed for carrying out real estate are either imported from abroad or mostly from abroad, so their prices increased due to the increase in the dollar value. In addition to the high cost of land, which represents the raw material for investment, pointing out that the lack of bank financing for developers causes a large funding gap.
Dowidar pointed out that the one-stop-shop mechanism needs to be developed within government agencies.
The chairperson of First Group, the real estate developer for KENZ Compound in 6th of October City, Bashir Mostafa, noted that there is a need to reconsider the price of sold lands and high interest rates on deposits, in addition to the value of the tax, representing 35% of total value of profits; so these factors are encouraging to not invest.