Assistant Minister of Housing for the New Urban Communities Authority (NUCA) Waleed Abbas has stated that the government, represented by the Ministry of Housing, decided, in coordination with Prime Minister Mostafa Madbouly, to issue a set of decisions to help real estate developers in overcoming recent crisis that occurred after the liberalisation of exchange rate and the consequent increase in building materials prices.
Abbas added that these decisions came in response to demands of real estate developers, in light of the coordination that took place with investors recently to maintain prices and value of units sold in the previous period.
He said that the state is keen on continuing the growth of the property sector, as it is one of the most important economic sectors that provide huge job opportunities. In addition, it wants to maintain the tripartite system of the state, real estate developers, and citizens to ultimately serve the interests of citizens.
He disclosed that the first of these decisions is to cancel fees of some allowances, such as volume base for determining population density and the cost of urban projects in new cities, so that real estate developers can benefit from it without paying any fees to the state. Moreover, reducing fees of some other allowances by half, and the value of fees for adding a new floor or increasing building built-up areas has been reduced by half.
He added, in press statements, that the total percentage of built-up areas in the project was increased, so that this increase in integrated urban projects reached 10% and in mixed-use projects by 5%. Meanwhile, service area within residential projects was increased by 15% instead of 12% to benefit developers and pour fully in the interest of project residents.
The strongest facilitation that was taken was fixing interest rate on land installments for a period of two years to become fixed at 10%, instead of the variable interest rate announced by the Central Bank of Egypt. Besides, the government has gifted developers an additional 20% of the project development period to complete constructions, meaning that the project that is scheduled to end within 5 years will get an additional one year (20% of the project development period) so that the deadline in this case becomes approximately 6 years, according to Abbas.
The assistant minister pointed out that instead of executing 90% or 95% of the project constructions to consider it completed, the project completion rate was reduced to 80%, with continued periodic follow-up to ensure the continuation of the project constructions, highlighted that developer will not be obligated to buy a period of time or withdraw a part of his land. Likewise, other procedures that were followed in the past when the construction of a project was delayed has been halted in order to reduce burdens placed on investors and real estate developers.
He noted that there is a great understanding between the state and real estate developers, stressing the existence of a strong plan to activate the partnership between the NUCA and real estate development companies, and added that it is planned to continue offering more lands to developers.
Abbas said: “There is a scarcity of lands in Fifth Settlement and New Cairo, accordingly, the NUCA is currently studying the area and vacant lands to list plots of lands that have not been developed in the past period to reuse them in an integrated manner for future offering. Additionally, the NUCA has offered lands in coastal areas such as New Damietta, which received a great demand by investors.”
Abbas concluded that the authority needs to direct more funds in partnership, and is currently working on a group of projects to be offered through the partnership system, adding that the focus is currently on projects that provide money to deliver facilities and services to urban projects of the state.
