Rise of interest rates will not affect property prices: Egypt

Rise of interest rates will not affect property prices: Egypt

Abdellah stated that property prices may be affected in the case of new savings certificates issued by banks with high interest rates. He highlighted that raising interest rates alone will not affect real estate prices, due to the CBE’s mortgage finance initiative, which adopts a 3% rate. Besides, prices of construction materials such as steel, scrap, aluminium, and others are declining significantly during the last period with expectations of a continued decline globally during the coming period.

He further elaborated that global markets recently witnessed a decrease in price of iron ore by 10% to reach $154 per tonne, and scrap price decreased by 14% to $484 per tonne, which in turn was reflected on Egyptian market.

He pointed out that the recent decline in steel prices in Egypt was not quickly reflected in its prices to consumers, because steel traders, when prices spike, raise the price of a tonne in Egypt immediately. Meanwhile, in the case of a global decline, the effect does not appear immediately on the pretext of the presence of steel stocks at high prices, and therefore it must be disposed of first and then sold at new price in new contracts.

The decline in steel prices locally would