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Tuesday, 11 July 2017

Is Egypt on the verge of a housing bubble collapse?

Is Egypt on the verge of a housing bubble collapse? Egypt currently isn’t experiencing a housing bubble at all, since bubbles are created when debt levels are high in the real estate financing system, SODIC Managing Director Magued Sherif tells CBC’s Lamees Al Hadidi during a televised debate over the country’s real estate sector. Sherif points out that mortgage finance is not a particularly popular concept in Egypt, meaning there is limited space for a bubble to emerge. The head of the Federation of Egyptian Industries’ real estate developers division Tarek Shoukry concurred that mortgage finance is underdeveloped here in Egypt, and said he hopes to see the Central Bank of Egypt’s mortgage finance initiative expanding to accommodate middle-income earners. These middle-class citizens will likely be forced to downsize their real estate purchases and settle on smaller units than prior thanks to the EGP float in November, Al Ahly for Real Estate Development CEO Hussein Sabbour maintains. He added that the sector’s skyrocketing prices has led some to perceive it as a precursor to a housing bubble. You can watch the debate in full here (runtime 31:08).

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