After years of underperformance mortgage finance is now enjoying a direct relationship with real estate, according to the Mortgage Finance Authority.
The country's real estate sector is growing at an estimated rate of 15% annually, while the mortgage finance market constitutes around 7 to 8% of the country's GDP. On the mortgage front there are seven operating companies and 14 banks supplying the market.
Its growth is much needed. 'In light of ongoing hikes in prices of raw material and dwellings, mortgage finance has become the only answer to Egypt's housing problems,' said Osama Saleh, chairman of the MFA. He said he expects the size of mortgage finance to double by June 2009.
It should also attract more foreign mortgage finance companies to Egypt. Already Dubai-based Tamweel and Saudi Arabia's Naeem Investments have been granted licences by the MFA this year and are currently laying the groundwork to launch business operations.
It is also hoped that a healthy internal mortgage market will attract more foreign investment at a time when growing tourist numbers mean demand is currently high for rental property.
The tax laws are favourable too. There is no Stamp Duty, Capital Gains Tax or Inheritance Tax to pay for British citizens living in the UK, if property is left to family members. There is also no tax for non-resident property owners in Egypt.
In addition to this property prices are low compared with European prices, with new developments on the Red Sea offering the opportunity to buy new apartments for less than £50,000.
