{"id":640585,"date":"2024-08-28T00:00:00","date_gmt":"2024-08-28T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/what-is-the-govt-doing-to-revive-and-enhance-the-building-and-property-sector-in-the-country\/"},"modified":"2024-08-28T00:00:00","modified_gmt":"2024-08-28T00:00:00","slug":"what-is-the-govt-doing-to-revive-and-enhance-the-building-and-property-sector-in-the-country","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/what-is-the-govt-doing-to-revive-and-enhance-the-building-and-property-sector-in-the-country\/","title":{"rendered":"What is the gov\u2019t doing to revive and enhance the building and property sector in the country?"},"content":{"rendered":"

What\u2019s in the cards for Egyptian real estate?<\/strong> The real estate sector has seen rapid development in recent years as the government has shifted its focus toward regulating building operations across the country. The Madbouly government is now backing the sector with new measures and simplified procedures, as the headwinds that real estate operations have faced over the past two years begin to recede. This new impetus is fueling growth in property, contracting, and construction materials markets, officials and industry insiders tell Enterprise.<\/p>\n

Remember:<\/strong> Global real estate consultancy JLL said in its Construction Market Intelligence Report for 1Q 2024 that Egypt\u2019s construction sector is set for a recovery<\/a>, with the firm penciling in a compounded annual growth rate for the sector above 8% until 2029. The report highlighted government spending, PPPs, infrastructure development, and rising FDI inflows as positioning the country to become an appealing destination for future investments.<\/p>\n

PERMIT ISSUANCE TO RESUME- <\/p>\n

Positive movement on long-awaited construction permits:<\/strong> The Local Development Ministry is set to roll out much-anticipated measures to resume issuing construction permits in various governorates, head of the House\u2019s Housing Committee, Mohamed Attia El Fayoumi, told Enterprise. These measures will significantly boost construction activity and reduce the violations that emerged during the four-year period in which permit issuance was suspended, El Fayoumi added.<\/p>\n

Refresher:<\/strong> The government imposed a suspension on building permits in 2020<\/a>, initially expected to last six months, in response to continued building code violations. The suspension seriously hurt real estate companies\u2019 bottom lines, with contractors facing challenges liquidating letters of guarantee and finding themselves short on liquidity.<\/p>\n

The new rules will see permits issued within 26 days:<\/strong> El Fayoumi highlighted that easing building requirements will enable applicants to obtain permits within just 26 days, which is expected to alleviate long-standing issues in the construction industry.<\/p>\n

Streamlining building regulations:<\/strong> Local Development Minister Manal Awad confirmed that the number of procedures required to obtain a building permit in cities will be cut from 15 to 8 steps. This simplification aims to ease the process for citizens and shorten the time needed to secure a permit.<\/p>\n

Plus, longer permit validity:<\/strong> One of the biggest wins for the sector is the government extending administrative building permits\u2019 validity to five years, up from just one, Tarek Shoukry, chairman of the Federation of Egyptian Industries\u2019 (FEI) real estate division, tells Enterprise. This will give developers more flexibility to manage projects, Shoukry added.<\/p>\n

More permit issuance will revive stagnant industries:<\/strong> The expected decisions will stimulate construction activity and demand for building materials, head of the Cairo Chamber of Commerce\u2019s Building Materials Division Ahmed El Zeiny told Enterprise. This comes as cement manufacturers have been reducing production due to limited demand, which was previously offset by investment demand that also took a hit due to rationing measures. El Zeiny stressed that resuming construction permit issuance with proper support from the government will revive an industry that serves over 90 other trades.<\/p>\n

MEASURES ARE IN THE WORKS TO HELP CONTRACTORS-<\/p>\n

Support for the contracting sector:<\/strong> The contracting sector is working to regain balance amid changes in economic conditions like the recent FX shortage and many companies\u2019 shift from now-scarce government projects to those led by the private sector, Egyptian Federation for Construction and Building Contractors (EFCBC) head Mohamed Sami Saad told Enterprise. The government has capped public sector investment spending at EGP 1 tn<\/a> in FY 2024-25 to control the budget deficit and stop the development of new projects.<\/p>\n

Tackling liquidity issues amid soaring inflation:<\/strong> Saad also noted that the current challenges facing the sector are rooted in liquidity shortages and delayed dues payments, compounded by high inflation and rising costs. EFCBC has received assurances from Housing Minister Sherif El Sherbiny that the ministry will consider several sector proposals, including:<\/p>\n