CAIRO: Leaders in the real estate and housing sectors will gather in Cairo today for the third annual Euromoney Egypt Housing Finance Conference.
The one-day conference will address challenges and prospects in the industry in a series of panel discussions and presentations.
For Iman Ismail, managing director of the Egyptian Mortgage Refinancing Company, and a conference panelist, this year’s conference represents the growth and potential of Egypt’s housing finance sector.
“We never expected this conference to be an annual event because three years ago the Egyptian real estate market was quite small. It is a sign of the times that the conference is continuing, it shows that we’re in a much better place market-wise today, she said.
Current issues in the local housing and real estate markets present interesting challenges for the developers, policymakers and financers meeting at this year’s conference.
According to Cairo investment bank EFG-Hermes, Egypt’s housing finance sector is growing, but still underdeveloped, with outstanding mortgages representing just 0.3 percent of GDP, a low number even by emerging market standards.
The latest available figures show that the size of Egypt’s mortgage finance market is approximately LE 3 billion, according to EFG-Hermes.
While the government has worked with local industry players to encourage growth in the sector by simplifying property registration processes and capping fees, high interest rates and low consumer confidence remain stopping blocks to growth.
Despite this, Egypt is currently one of the few economies reporting positive movement in the housing sector, according to a recent report published by Euromoney. This trend has been fueled by steady local housing demand, falling prices of raw materials and decreasing inflation rates.
“Everyone needs to understand that while Egypt may have economic problems, it is not experiencing strong effects from the international financial crisis. The mortgage market, banks and finance sector have not been hit, and the real estate market is continuing to do well, said Ismail.
The sector’s ongoing challenge, however, is to provide housing for low- and middle-income families who comprise the bulk of Egypt’s population and who suffer most from shortages of new construction in their price range.
“The conference will mainly focus on the issue of affordable housing – how to finance it, how to structure affordability and how to address the shortage, said Suha Najjar, panelist and managing partner and director of research at Pharos Holding.
“This is a crucial issue in Egypt where the housing boom hasn’t benefitted lower income individuals. The conference will provide more information on the experiences of other countries like Mexico and South Africa that Egypt can use as a model when tackling this issue, she added.
According to government figures, the total annual supply of housing units is 150,000 only, which represents a deficit of up to 350,000 units per year.
The conference is set to address this issue in a series of panel discussions that will explore the role of mortgage financing and real estate developers in adapting to changing market conditions and strategies for meeting demand in the affordable housing sector.
The day’s agenda will also include speeches by Minister of Investment Mahmoud Mohieldin and Minister of Administrative Development Ahmed Darwish along with remarks from Pamela Lamoreaux of South Africa’s International Housing Solutions and Tonia Secker of Trowers & Hamlins.
Ismail is hopeful about the contribution this year’s conference will make to advancing progress in the housing finance sector.
“I’m optimistic about attendance, we are expecting about 500 attendees and a great line-up of speakers, she said.