The Egyptian government is actively working to grow productive sectors across multiple fronts and to create a conducive business environment to attract both domestic and foreign investment. Much emphasis has also been placed on improving the country’s real estate sector, with a slew of measures that are aimed at enhancing buyer-seller confidence in the real estate industry, which ultimately translates into robust growth.
Last month, the country's Cabinet approved a draft law to establish a nationwide ID system for properties. That entails the formation of a database where each property is assigned a non-duplicable unified identifier linked to a unified base map, according to a statement by the Cabinet.
In addition to that, the country is also looking to introduce the real estate bourse, which will serve as a platform for consumers and businesses to seamlessly sell or buy real estate while eliminating fraudulent practices and mitigating the risks associated with real estate investments.
BENEFITS OF A BOURSE
During his recent visit to the coastal city of El Alamein, Egyptian Prime Minister Mostafa Madbouli stressed that the government "pays great attention" to increasing the volume of real estate exports by establishing a real estate bourse and real estate funds. 'Exports' refers to existing units being sold to foreign buyers or Egyptians living abroad.
A report by local news platform ElShorouq said that efforts to finalize the legislative and regulatory framework necessary for the establishment of the real estate bourse are “ongoing,”. It added that it is scheduled to launch next year.
“The launch of the bourse will undeniably enhance regulatory oversight, which was lacking in the past,” said Mahmoud ElSabongy, founder of proptech company Boyot.
“For so long, consumers have been encountering numerous challenges when it comes to buying and selling real estate assets, which is one of the key hurdles impacting the trade volume in the sector,” he added. “Having a regulated, legalized channel for trading those assets will maximize the market liquidity.”
On the difference between the real estate bourse and funds, ElSabongy said that the first primarily benefits the end consumer by providing them with enhanced accessibility; while the real estate funds merely cater to large businesses, with the profits generated by real estate funds distributed among the shareholders, whether they are private sector entities or government organizations.
ESTABLISHING A REAL ESTATE BOURSE
This aligns with the government's recent push to establish a national real estate ID system to facilitate the process of property registration and streamline the documentation of property details and associated utilities. The timely, effective implementation of the national real estate ID system will be crucial for the establishment of the bourse.
For the first phase, the real estate bourse will only consist of the commercial and administrative units since they are faster and easier to register, with residential units to be included later, according to ElShorouq's report .
It is worth noting that Saudi Arabia also announced its launch of a real estate exchange in late August. The trial phase of the Saudi Real Estate Exchange was launched by the Saudi Ministry of Justice in November 2021.
FOREIGN CURRENCY SOLUTION
ElSabongy further added that the introduction of a real estate bourse will encourage foreigners to invest in real estate, which will help attract an influx of hard currency, the shortfall of which poses a great challenge to the economic prosperity of the country.
“[I] think it is one of the solutions to finding a way out of the foreign currency crunch,” he explained.
“If a foreigner is willing to buy a property, most likely they will do so in their original currency through banks; a lot of countries have already made this even mandatory, such as Turkey, which has gone for the same strategy across other sectors, not just real estate,” he added.
In a similar vein, the Egyptian Cabinet also issued a decree last month stating that expats in the country will also be required to apply for residency and pay fees in hard currency.