Property Select

• Home
• Property Search
• News
• About Us
• Contact

MORTGAGE STEP FORWARD IN EGYPT

Monday, 06 Oct 2008

Although Egypt did not join the mortgage brouhaha until recently, its favourable policies, burgeoning population and the USA’s injection of money are invigorating the market for property in Egypt. The increasing prices, more structured policies and economic expansion have combined to make the Egyptian mortgage business become active. This is likely to lead to flourishing mortgage lenders and an expansion of the Egypt property market to incorporate poorer people.

The number of bond financing firms has increased from two last year to seven, and this has spurred new development. The current mortgage policies came into effect in 2001, and in 2004 the rules for Egypt property registration were also eased, which was an important development, because a structure has to be registered officially before a bond on it can be granted. The fees were also reduced and restricted to no more than LE 2,000, plus the cataloguing time for a structure was cut to 3 months from 18.

Although it has been slow to take off, the rapidly increasing price of property in Egypt, which has helped to get the mortgage sector going, will also most probably keep driving its growth for several years to come. The traditional short-term mortgages, however, are not a feasible choice for most people any more, with the runaway prices of accommodation in Egypt.

Recent foreclosures have aided the new sector by reassuring industry observers who were concerned that the new policies would fail when put to the test in court, because these default cases have been successfully prosecuted.

Mahmoud Mohieldin, Egypt’s minister of investment, said, "Those who are interested in the sector are not only interested in seeing the entry rules apply, but they also want to make sure the exit rules work. After having the legal framework, it is also important to ensure the application of the law."