Real estate reconciliation: Egypt plans seeks new deal despite corruption fears
Egypt’s government will reach a reconciliation agreement with a number of real-estate developers soon, revealed Egyptian housing minister Tarek Wafik on the sidelines of Egypt real estate summit on Wednesday.
Wafik, who preferred to keep the developers’ names anonymous, confirmed that a reconciliation deal would retrieve the state’s financial rights in land that was sold at below-market value to developers before the January 25 revolution.
He added that his ministry has submitted an official request to the cabinet to revive the previous land-law (59/1979), which allows the government to allocate land directly to investors at fair prices, without putting them up for auction.
The current tendering and bidding law (89/1998) has caused the soaring of land value, which spooks developers making them less inclined to build in the country.
“We will not replace the current land law – tendering and bidding law (89/1998) – with the previous,” Wafik explained.
“Both laws will help us but we will form a committee to set fair and transparent prices for plots.”
“My hands seem to be cuffed while working under only auctions law, I can’t tempt developers," Wafik commented.
The minister pointed out that if the Egyptian cabinet would not reply soon, another request is likely to be sent due to the importance and necessity of this law (59/1979).
Several Egyptian activists have criticised the reinstatement of the land law no.59 as numerous corruption cases under former President Hosni Mubarak were related to the illegal sale of state land.
Egypt’s real estate developers said at the same event that they only care about a law that facilitates distribution of land whether through direct allocation or auction.
Hesham Shoukri, the CEO of the real estate developer Rooya Group, said that a combination of both land allocation systems would be the preferable way to distribute plots to developers.
“I don’t care about the land allocation system; all I care about is fairness and transparency; the government shouldn’t unnecessarily inflate lands’ prices,” said Ayman Ismail, CEO of Mountain View one of Egypt’s real estate developers.
“Developers are not social workers so they will have to pass the price on to the customers.”
Saudi Arabia and Egypt are the best countries for real-estate developers in the Arab world due to the low price offered per square-metre so the government and the organising bodies should set proper regulations, Ismail told Ahram Online.
In February, Hassan Abdel-Aziz, the head of the Federation of Construction and Building Contractors (FCBC), announced that 24,800 contractors – both individuals and companies – had failed to renew their FCBC membership within the past two years due to declining business.
“Contractors are different from real estate developers, they used to work with the cash-strapped Egyptian government to construct the country’s infrastructure, so the deteriorating statue of the economy has negatively impacted them,” Ismail commented.
- Al Bustan Centre & Residence wraps up a successful participation in ATM 2015
- The reality of realty: inbound property investments in GCC 'far less' than outbound
- Dubai's hospitality sector is a sound investment
- Quiet and wise: How Oman is transforming itself into a major logistics hub
- Revealed: the top real estate tycoons in the ME