Smoothing bumps in real estate

Smoothing bumps in real estate

The Central Bank of Egypt (CBE) decided on 7 February to amend the financing regulations for the real-estate sector. Loans may now be disbursed to the private sector to pay for land, provided that the land on which housing units are to be built is the property of the borrowing company or was allocated to the company from the original owner.

The decision also allows grants to be made to finance real estate projects implemented jointly by real estate companies and a state entity or other private sector companies. This is conditional upon the creditworthiness, good reputation, and high financial solvency of all the parties involved.

The CBE decision is an amendment to previous regulations regarding the financing of real estate development companies building housing units.

The move will help to stimulate the sector because earlier regulations had stated that funding for companies excluded loans to buy land, said Alaa Fekri, a member of the Real Estate Investment Division at the Federation of Egyptian Chambers of Commerce.

With the latest amendment, companies will be able to pay the price of the land to the state, since 95 per cent of land is bought through the government, he added. The