Prime Minister Ibrahim Mehleb tasked the Ministry of Housing to study a proposal by the Real Estate Investment Division that suggests the government provide lands for the real estate developers in exchange for 15% of housing units as payment for the land, according to Mamdouh Badr El-Din, head of the division.
Badr El-Din told Daily News Egypt that “the developer would be responsible for all the costs of construction and the bases of the buildings, while the government would acquire 15% of the total number of the fully-finished housing units”. The government would determine the category the rest of the units would be sold for, and would be involved in pricing them as well.
Badr El-Din met Prime Minister Mehleb Saturday evening. He added that the division will meet the Minister of Housing Mostafa Madbouly on Sunday to discuss the proposal. He clarified that the Prime Minister determined that the government would provide lands in the cities of New Assiut, New Minya, New Tiba, Badr, and Borg El Arab as a start.
The housing units would vary between 90 and 140 square metres, and would be divided into low and medium-sized income levels. He noted that the real estate developer suffers from the “crazy” increase in lands prices; a square metre in the Madinaty project has jumped to EGP 1600.
However, Hossam El-Kawish, cabinet spokesman, said that the government set major determinants to approve granting the real estate developers lands in exchange for obtaining housing units. Most importantly is the selling price to the citizens, and the guarantee that the private sector will not exaggerate in pricing the units.
“The determinants include also the period of execution and adherence to the time table, in addition to determining the percentage that the government would obtain in the form of housing units,” according to El-Kawish.
El-Kawish asserted that, if the project is approved, lands would be provided in Upper Egypt, especially the cities of New Assiut, New Minya, and New Tiba, as a start. It would be also possible for the real estate developer to obtain pieces of lands in other cities to execute the project.
Bad El-Din disclosed that Sarie – Eldin & Partners Legal Advisors finished the union law, which will be presented to the Minister of Housing on Sunday, asserting that the union law will be issued by the Prime Minister and that it does not require presidential approval.
“We will discuss with Madbouly a proposal to initiate a new fund to protect the real estate consumer from commercial risks,” said Badr El-Din, adding that they have a comprehensive perception about the fund’s board of directors.
According to Badr El-Din, the fund works on two targets. The first is to categorise the real estate developer depending to the volume of his business. The second is to protect the consumer from swindling and fraud that he/she may be subject to after purchasing the housing unit. Badr clarified that real estate developers will contribute to the fund due to the volume of their business.
Badr El-Din disclosed that the division submitted an objection to the prime minister over the absence of a clear mechanism for collecting real estate tax on administrative and commercial projects. He added that Mehleb tasked the Minister of Housing to start discussions with Minister of Finance, Hany Kadry Dimian, to resolve the issue.