The 3% mortgage initiative is unprecedented in Egypt, NCDA

Mohamed El Bostani: The initiative help boost the real estate sector and create opportunities for low and medium-income earners to own affordable housing units.

President Abd El Fattah El Sisi’s 3% mortgage initiative is deemed as unprecedented in the history of Egyptian mortgage sector, and as one of the most important programs that cared for the Egyptian citizen and his/her ability to get a housing unit, according to Head of New Cairo Developers Association Eng. Mohamed El-Bostani.

“This mortgage initiative allows the majority of Egyptian citizens to get  affordable and suitable housing units without having to squeeze their respective monthly incomes,” said he, adding that this initiative will entice foreign and Egyptian investors to invest in properties.

The initiative will be helpful in curtailing haphazard building construction and regulating all properties and residential houses, and thus ensuring the ownership of holders of any housing unit, he noted.

“Whoever wants to get a housing unit has to make sure that building permits are issued in the correct manner, by means of having recourse to the District or the Authority to which the unit belongs.”

While addressing coronavirus-induced declining sales, the initiative may evolve into a comprehensive mortgage law encompassing citizens with all income segments. 

“The initiative will help in the first-place bolster housing projects that are currently executed by the state in support of citizens intended to be served by this initiative. The private developers can take part in implementing projects to the advantage of medium-income earners, given low-priced lands are available.”

The initiative is credited for allowing developers to compete over the construction of housing units for medium-income earners, only in case lands are sold to them at prices so low that good profitable margins can be reaped.

“Also, the initiative boosts the construction of that type of units and help reduce costs of building upscale units with bleak selling prospects at the time being.”  

Deputy governor of the Central Bank of Egypt Gamal Negm had said that the mortgage initiative unleashed by President Abd El Fattah El Sisi for the low and medium-income earners costs EGP100bn.

He noted that the initiative will help roll out affordable housing units to the benefit of low and medium-income earners at less than 3 percent interest rate and a 30-year tenure.