A head of the business association excludes "the housing bubble"

The engineer Fathallah Fawzi, vice president of the Men's Association of Japan. Egyptian Affairs, chairman of the Construction Committee, said that the occurrence of a real estate bubble on the Egyptian market "excluded", and He said that according to official statistics and careful badysis, the Egyptian market is characterized by a huge and growing demand in light of the high population density of 100 million, an annual population increase of 2.5 million, there are 800 to 900 thousand annual marriages, that is, to ie, the potential demand or the actual need for housing units of at least 500 to 600 thousand units per year.

At the Construction Committee Workshop of the Egyptian Businessmen's Association, Fawzi said: "We find that the two targeted sectors of the private sector, the upper and middle housing , represent 15% of total demand (about 100,000 units annually) The private sector, about 150 companies to produce and deliver about 25 thousand units a year, while the largest segments, the social and the average 85% of the demand, and the state carries out projects supported by different rates corresponding to their financial potential of the target segment.

He explained that the state provides according to all statistics about 170 to 200 thousand units per year on the 500 thousand units required, indicating the existence of a cumulative deficit in the realization of real estate units required, and without the occurrence of a bubble or stagnation for long periods.

He stressed that the i property developers in 2016 and 2017, and the first half of 2018, reflect growth in sales volume despite price increases, as the first half of this year, companies were able to control their sales in the same period the 39, last year. According to his studies, MAP has shown an annual growth in demand for real estate equivalent to 18%.

It points out that the profit margins of real estate companies do not exceed 15 to 20%, as shown by the financial results of companies listed on the Egyptian Stock Exchange, and the price increases of real estate units resulting from changes in implementation costs. More profit, no price decrease on the market.

"The continuous rise in the prices of real estate, especially land, which currently represents a relative weight of 40 to 50%, is multiple: the units produced by private companies in the administrative capital, for example the price of sale The average cost of land is 4000 LE and the cost of buildings is 3000 to 4000. Adding other costs such as design, supervision, administrative costs, sales, marketing and taxes, the unit cost is at least 80 %.There are companies that get a zero profit margin or who suffer losses due to an error Estimating the cost of the project or the increase of the costs. costs during the implementation period.

He also points out that resale sales are slowing given price increases given the unit's willingness to sell "cash", while most companies real estate placen t units with various customer-specific down payment systems. He pointed out that some speculators or holders of more than one real estate unit could attend resale in the future because of their obligations to pay such installments according to the rising prices and cost of their obligations , and that it would be difficult to resell or forego prices that realize the required gains, noting that if the customer repay the unit to the company will be in accordance with the contract reduction of & nbsp; & nbsp; & nbsp; Approximately 10% of the total price of the unit. The current challenge for the sector is the weak purchasing power of target segments with customers in light of price increases, stressing that this can be overcome by activating the mortgage financing mechanism and putting in place a mechanism for project follow up. He stressed that it will be discussed with the Real Estate Investment Division and all those interested in the sector to submit to the Ministry of Housing the proposal not to make identical decisions, with the exception of units to ensure the rapid operation of units.

The coming period requires special attention to the industry and the abundance of industrial land to increase production and reduce the import bill in order to fill the potential trade deficit gap. according to World Bank figures expected to reach $ 38 billion by the end of 2018, to reach $ 50 billion over the next five years.