The export of real estate’s value in the world is estimated at $2tn, while the size of the real estate industry (buying and selling) is estimated at $250bn annually, according to Mohamed Montasir, CEO of Egyptian Experience.
Montasir said that the volume of real estate purchases of British people from foreign markets is about $12bn annually, due to the high real estate tax in Britain, which is close to 40% of the value of the property, which makes British citizens prefer to buy property outside their country.
Montasir added that the export of real estate in Egypt has achieved positive results due to Egyptian real estate being less expensive compared to the global market.
He noted that the most important challenges facing the export of Egyptian real estate is a shortage of legislation regulating real estate export and a property registration problem, which is a problem for Egyptian as well as foreign citizens.
He explained that the only law that regulates the export of real estate is Law No 82 of 1996, which has not been amended since it was issued except by two ministerial decisions, one in 2005, which provided some facilities for tourists in South Sinai, and the second in late 2007, for granting temporary residence permits for foreigners in return for purchasing property.
Montasir called for developing the legislative structure, especially in the touristic areas that developers work in, and the development of infrastructure, especially airports, which are relying on the absorption of the number of tourists in the city.
“Egypt needs $12bn annually from the tourism industry, which will be achieved by providing strong infrastructure,” Montasir said. “The unified contract is one of the necessary guarantees for the export of property and some developers have problems in understanding the law regulating property export and they are in need of identifying the legal needs of foreigners. Egypt is still a virgin market in the field of industrial development and medical tourism.”
He pointed out that Egypt needs investments of $750bn to be directed to infrastructure projects.
For his part, Mario Volpi, sales manager at Engel & Völkers, a German company, said that Dubai’s experience in exporting real estate began in 2002 when it allowed ownership by foreigners in a certain area, but there were a number of challenges that faced the initiative, including delayed implementation of various projects.
However, Dubai has developed a framework to be able to supervise investments on land owned by the state.
Volpi added that there is a regulatory body that provides licenses to real estate marketing companies to ascertain the company and the project being marketed.
He pointed out the rise in the interest rate in the Egyptian market compared to the decline in the interest rate of the market of Dubai, which makes the UAE more attractive than Egypt.
Ibrahim El Missiri, CEO of Soma Bay said that there are many challenges that may face the process of exporting property to foreigners and increase the number of non-Egyptian customers for Egyptian projects, most notably the problem of residencies, and emphasis on confidence in the local market. This is in addition to providing the services needed by clients when living in a particular place.
El Missiri pointed out that his company was marketing a large part of its projects to foreigners abroad, which has declined during the recent period as a result of various circumstances, noting that the company is seeking to increase property marketed overseas in the coming period.
He further explained that there is a need to provide a component of confidence in projects that are marketed to foreign clients.