In a speech at the ninth "Think Commercial" conference, Sawiris said high interest rates are one of the biggest challenges for Egypt's real estate sector. He noted that the actual value of a housing unit represents only about 30% of its final price, while the added interest on installment payments accounts for nearly 70% of the total cost borne by the buyer.
Sawiris explained that developers are forced to offer long
payment periods, sometimes up to 15 years, to cope with rising prices and
declining purchasing power. He argued that banks should be handling this role
through mortgage financing tools, as developers incur an additional financial
burden from these practices.
He called for continued interest rate cuts or for a specific
interest rate to be set for the real estate sector to enable customers to buy
units with reasonable interest.
Sawiris also urged for an acceleration in the issuance of
licenses for developers, stating that delays increase unit costs by 20 to 25%.
He reiterated that the long payment terms offered by developers, with interest
rates reaching 25%, mean that about 70% of a unit's price is made up of
interest on installments. This, he said, severely pressures companies'
profitability and makes their continued operation difficult under current
conditions.
Regarding his plans to merge all his companies under the umbrella of Orascom Investment, Sawiris said this step would not affect his efforts to list Ora Developers on the UAE markets in the near future.