The latest developments in Real Estate financing for the units under construction

Real Estate financing

the source from Al-Masry Al-Youm on 22/6/20 as a saying entitled
Real estate financing for units under construction collides with the continuation of the “Central” ban
The most important thing mentioned in the article

Ahmed Shalaby, CEO and Managing Director of Tatweer Misr,

said that despite
These decisions are positive, but by studying them, it turns out that they will not have the desired effect in activating funding
As long as the Central Bank prohibits banks from entering into financing units under the
No: “What I have approved?
Finishing, Ahmed Sabbour, Chairman of the Board of Directors of Al-Ahly Sabbour Company, agreed with him
Not to move the market
Financial supervision is an important step,

and we hope that the Central Bank will issue a similar decision
real estate and reviving sales,”

noting that real estate finance succeeded in achieving a boom during the eight
In the past years,

it jumped from 250 million pounds in 2014 to 12 billion pounds, but it is still less
A lot of the target percentage in a market the size of Egypt,

should not be less than 60 billion pounds,

Ayman Abdel Hamid, Managing Director of Tameer Real Estate Finance Company – Al Oula – Decision Backgrounds
“There is nothing legislatively preventing in the real estate finance law from real estate finance companies providing
Financing for housing units under construction,

and until 2008 this type of financing was provided
Funding, but in the wake of the global economic crisis,

some real estate developers stumbled
In implementing its projects,

clients refused to pay the installments to the finance companies, which caused them losses
It was severe, and finance companies were forced to stop this activity due to the high levels of risk,” he said
Abdul Hamid: “Returning to financing units under construction requires the presence of a third party in the process,

The financing company guarantees the right of financing companies if one of the parties violates the conditions. Confirmed that oversight
Finance allows its financing companies to grant financing to units under construction at a rate not exceeding
25% of the equity, which is a small amount, especially since the capital of companies averages 50 million
.fairy

The Managing Director of the First Real Estate Finance Company welcomed the decision to deal with the housing unit
As the guarantor and cancel the condition that the premium does not exceed 40% of the customer’s monthly income, stressing that
The previous condition deprived the majority of customers of their right to obtain an appropriate unit, expecting progress
Notable in the financing activity with the application of this loan

Tarek Shoukry, Undersecretary of the Housing Committee in the House of Representatives, Head of the Real Estate Development Chamber in the Federation, said:
Industries, the Chamber held a series of meetings with developers with the aim of coming up with proposals

It is submitted to the Central Bank to return to financing units under construction, and a proposal has been reached that requires
The developer’s obligation to retrieve the unit or repurchase it from the bank in case the customer fails to pay the installments,
Provided that the new price is close to the value of the installments and not the new market price

The bank considers that the market price is attractive or high, so it has the right to keep the unit if it wants, and thus will not
The bank bears any risk

Shoukry stressed that activating real estate financing has become the only mechanism currently to maintain market activity

And its continued strength and contribution to the national product, in light of turbulent market conditions and high rises

The cost and the consequent increase in selling prices at a time when purchasing power is declining

The Chairman of the Chamber praised the financial control amendments with regard to dealing with the real estate unit as

The guarantor of the financing, not the credit capacity of the customer, adding that in many cases the customer does not appreciate

He had to prove the items of his real income, which prevents him from obtaining real estate financing
A talk outside this framework will not be useful, linking financing to the customer’s income and specifying a percentage of it

We work in vicious circles, and the desired effect of maintaining market power will not occur
Real estate and its contribution to the national product and the job opportunities it provides

According to the statement of the Financial Supervisory Authority, a proposal to amend the value of the financing granted – to the investor is currently being studied

The one- to become 25% instead of 15% for residential purposes, and raise it for non-residential purposes to become 40% instead

From 30%, in line with the increases in the value of housing units, provided that a maximum limit is set
Concentration ratios for the total evaluation portfolio,

along with a proposal to reduce the required financial amounts
Payment from the property buyer, to become 10% of the unit price instead of 20%,

in order to urge developers
Real estate owners are encouraged to sell the financial rights of their real estate portfolios, and the authority will also work to provide

A proposal to the board of directors for an alternative mechanism to look into cases of customers who default on payments, and was identified

in The Egyptian Center for Voluntary Arbitration in Non-Banking Financial Activities to Overcome Problems
The slowness in the litigation procedures