Marketing no less than 30% finished projects is a boon for clients and developers, MREC

The directive will help persuade developers holding a stock of finished units to make use of mortgage loans

Chairperson of MREC Real Estate Service Mahmoud Abd El Halim said President Abd El Fattah El Sisi's directive not to promote unfinished projects with less than 30% completion rate will bolster the  real estate sector and will  be a boon for all parties, clients, developers  and the state.

" When they become capable of  owning a housing unit with actual presence on the ground, the clients will be sure their rights are kept intact, while serious developers will be incentivized to speed up constructions and to come up with  fresh mechanisms for minimizing  costs," said  he.  

Under the presidential directive, the developer will study spending priorities and may decide to withhold some items, such as advertisement costs, so as to reach construction targets, he explained.

"Developers with a stock of finished housing units may seize the opportunity of  these units to make use of mortgage loans, generating good benefits for the entire industry."  

Escrow account will drive banks to play a role in  the selling process

Escrow account, through which banks play a role in the selling process, may be upheld in the upcoming period, he  maintained. "Under the escrow account, a banking account associated with the project and through which clients can deposit all money required for purchasing the housing units, will be opened. Also, spending on existing phases of construction can be so tightly controlled that developers will fail to funnel any sums of money belonging to clients to any other projects or expansions.

Clients, under escrow account measure, will definitely be able to get the housing unit on schedule, together with all his/her rights specified in the contracts, particularly on the event developers fail to meet their financial obligations.

The Egyptian state is taking several measures to regulate the real estate sector, a fact that has a positive effect on volume of local and foreign investments and helps enhance the push towards property export, he added, predicting the period to come to witness wider expansions by  serious developers.   

President Abd El Fattah El Sisi gave a directive to  stop promoting any real estate  project unless constructions reach no less than 30% completion rate, with the aim of guaranteeing rights  of home subscribers and ensuring developers are serious  enough about their own projects.

President  Abd El Fattah El Sisi said the state is entitled to play a regulatory role to protect citizens' money and create a safe investment climate.