CAIRO - Shifting to a free market economy, Egypt has devised a raft of measures to attract more foreign direct investment. Key among these measures are legal reforms that target the easing of investment procedures and enabling non-Egyptians to own land and real estate in the North African country. While investors call for more liberalisation of the legal system and economy, analysts say Egypt has allowed foreigners to own land and real estate for the first time since the July Revolution in1952. There may be some restrictions, but the situation is better than 30 years ago, one legal consultant said. "The law has restricted foreign ownership due to national security reasons or protection of the national economy. Considering it a matter of national security, the Egyptian law forbids ownership of land or real estate near international borders. For example, foreigners are banned from buying real estate or land in Sinai," Yasser el-Gamel, a Cairo-based legal consultant, told the Egyptian Mail in an interview. But how wouldn't such restrictions contradict international law, which safeguards the right of man to privateownership. "International law has nothing to do with property ownership in a foreign country. It's up to a country's legislature to decide such matters, according to its social and economic conditions," el-Gamel said. "According to Law 15/1963, non-Egyptians cannot own farming land. As agriculture is Egypt's economic mainstay, foreigners are kept out of this strategic sector," he explained. "Non-Egyptians are allowed to own plots of land or real estate, according toLaw 5/1996. But the country's legislature has put some restrictions in place. A foreigner has the right to own up to two units for residence, totaling 4,000 square metres each," he said, adding that there might be a need to increase the number of units to "freshen the market". The legal expert points to an article in Law 5/1996, which is seen by analysts as a real obstacle. "If a foreigner buys a plot of land, he must start construction in less than five years. To maintain market stability, the law has stipulated that a foreigner can sell purchased real estate only after five years," he explained. Attracted by its cheap land prices, major developers from the Gulf tried to set foot in Egypt. From the UAE, Emaar and Al Futtaim pioneered the local real estate market. The UAE has recently announced a housing project, Khalifa City, worth $100 million on 578 feddans (acres) andlocated in New Cairo. This month, Libya unveiled plans to build Al-Fatih City on around 5,600 feddans, costing LE116 billion ($20 billion). In collaboration with the Arab League, Egypt's Export Council for Real Estate launched an initiative titled "Housing Units for Every Arab". It aims at boosting the property market in the Arab world and pushing for unity. "Prices here are cheaper than in the Gulf region, Syria or Lebanon. Besides, we live on less than five per cent of Egypt's land, while the remainder is untapped. Therefore, Egypt is a very promising destination for real estate investment," said Mahmoud Abdel Raouf, a sales executive at El-Tawfiqia for Construction and Development. "Egypt boasts land, labour, building materials and developers. The real estate sector is expected to grow rapidly in the coming years, due to higher local and foreign demand," Abdel Raouf said. Egypt's real estate market began feeling the pinch in the third quarter of 2008 when the US sub-prime mortgage crisis hit world markets. Dubai, the Arab Gulf's real estate hub, was hit hardest and its property market ground to a halt. Prices for residential properties in Dubai plummeted by up to 50 per cent in 2009, according to Standard & Poor's. "Demand for low and medium cost units will double or triple by 2020, as population grows. Demand for luxury units is seen to grow at a slower pace, driven mainly by Arabs," Abdel Raouf forecast. There is growing demand for low-cost and middle-class housing in this most populous Arab country of 80 million, as there are around 600,000 marriages annually, according to official reports. The population of Egypt is forecast to total 99 million by 2025, according to a UN report. By 2050, Egypt's Supreme Council for Urban Planning and Development predicts the population to reach 140-155 million. The property market is seen to benefit from a rising dollar on the local market, a real estate agent said. "The rising dollar has increased demand for housing units, especially among Arabs. Generally speaking, the property market has recovered from the global downturn," Sameh Mikhail, a real estate agent, told this newspaper. "The Dubai crisis and the US sub-prime mortgage debacle are over and the Egyptian market is growing at higher rates. Prices have already started to pick up due to strong demand," Mikhail added.
