Egypt's long-awaited new mortgage bill cleared its first hurdle in parliament on Sunday, May 6, giving a boost to sentiment in the property and construction sectors. The purpose of the bill is to pave the way for mortgages as a financial instrument in Egypt, where until now inadequate provision for guarantees to lenders has prevented the development of an effective mortgage system.
The People's Assembly gave its preliminary backing to the draft legislation on Sunday, and then moved on to detailed consideration of the bill, approving three of its 54 clauses. The assembly must debate and approve every clause before the draft legislation becomes law.
But parliamentary sources said they expect the People's Assembly to approve the bill by the end of May.
The assembly also approved the formation of a committee to formulate additions to the draft law proposed by Prime Minister Atef Obeid to address the needs of poorer Egyptians, in response to criticism from some parliamentarians.
Among the proposed additions to the bill is an amendment that land costs for low-income housing projects should not be factored into the price of the housing units. Another says interest on mortgages for these units should not exceed six percent.
The assembly began debating the bill on Saturday, but the session was adjourned when some members said the bill did not serve the interests of the poor. Both the Shura Council—Egypt’s consultative upper house—and the cabinet have already approved the mortgage law.
Egypt's stock market has risen every time the bill takes a step nearer to becoming law. Construction stocks were among the day's leading stocks at mid-session on Monday. — (Reuters, Cairo)
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