Mortgage finance companies are expected to provide a total of EGP 3.5bn in finance in 2021, according to Ayman Abdel Hamid, CEO of Amlak Finance and Real Estate Investment.
This funding will be additional to the funds from the EGP 50bn mortgage finance initiative by the Central Bank of Egypt (CBE), which is aimed at financing houses for middle-income customers.
Abdel Hamid added that mortgage financing will make significant gains in the coming period, as financing agencies have long been recognised as primary beneficiaries of crises.
Mortgage financing will be particularly fruitful following the novel coronavirus (COVID-19) pandemic, making gains on customer fears that some real estate developers will delay deliveries of their projects.
Abdel Hamid elaborated that mortgage financing companies are the safest haven in terms of real estate investments in the current period, as the funds will be directed to ready-to-move units.
He emphasised that mechanisms must be put in place to work out cooperation protocols between real estate developers and mortgage financing companies. This would ensure they work together to revitalise and create stability in the real estate market during the coming period, instead of the unjustified pre-crisis competition.
“Before the COVID-19 outbreak, real estate companies provided payment plans of eight and 10 years, but after the crisis, some real estate developers have faced some problems with financial liquidity,” Abdel Hamid said. “This has caused them to resort to joint cooperation with mortgage financing companies, to provide new products that suit both market needs, and the regularity of financial flows to allow developers to complete their projects.”