Key Updates from Egypt’s Real Estate and Economic Sectors

In a significant move, the Ministry of Housing announced new financial relief measures aimed at easing the burden on property owners across Egypt. Dr. Hassan El Shorbagi, Vice President of the New Urban Communities Authority (NUCA) for Real Estate and Commercial Affairs, revealed that the ministry is offering a 70% reduction in late payment penalties for those who settle their outstanding dues in full. This initiative applies to various types of properties, including residential, administrative, commercial units, and land plots of all sizes (residential, commercial, service, investment, industrial, etc.), as well as villas and beachfront units built by the authority. These measures are available for a limited two-month period following the announcement in daily newspapers. El Shorbagi emphasized that these incentives are applicable to properties with active allocations and those where cancellation decisions have been issued due to non-payment but remain in the possession of the customer and have not been reclaimed by the authority. However, the relief does not extend to partnership-based lands or lands that have already been canceled and reclaimed by the authority.

In related developments, the New Administrative Capital is making headlines with record-breaking financial achievements. Eng. Khaled Abbas, Chairman of the Administrative Capital for Urban Development (ACUD), announced that the company achieved an unprecedented profit of EGP 26 billion before taxes, reflecting a 29% increase compared to the previous year, which saw profits of EGP 20 billion. Over the past seven years since its inception, the company has accumulated nearly EGP 53 billion in pre-tax profits. This year alone, ACUD paid EGP 11.7 billion in taxes, including EGP 8.6 billion in income taxes, EGP 3.1 billion in value-added tax (VAT), EGP 1.3 billion in profit taxes, and a solidarity contribution of EGP 200 million. Since its establishment, ACUD has paid a total of EGP 19.8 billion in taxes. Abbas highlighted the remarkable transformation of an area that was of little value just seven years ago, noting that the company has generated returns for the state ranging between EGP 80 and 90 billion over the past seven years, with its assets now valued at EGP 275 billion.

Furthermore, consumer spending patterns in Egypt have shown a notable increase in installment-based purchases. Egyptians obtained EGP 6.8 billion in financing from installment companies for the purchase of electrical appliances and electronics during the first half of this year, accounting for 27.95% of total consumer financing activity. According to the Financial Regulatory Authority (FRA), the number of beneficiaries of consumer financing in Egypt increased in June 2024 for the second consecutive month, with a total of 344.3 thousand customers securing financing worth EGP 4.2 billion, compared to 284.3 thousand customers who received EGP 3.7 billion in financing during the same month last year, marking a 21.1% growth in the number of customers and a 15% increase in the value of financing. Additionally, from January to June 2024, the number of beneficiaries of consumer financing reached 1.768 million, with a total financing value of EGP 24.2 billion, compared to 1.708 million beneficiaries who received EGP 20.6 billion in financing during the same period last year, reflecting a 3.5% growth in the number of customers and a 17.7% increase in the value of financing.

Lastly, the Ministry of Tourism has issued new regulations for tourism companies involved in transportation services, emphasizing the need for compliance to ensure the safety and quality of services. The ministry has mandated that tourism companies must not employ drivers who are not registered with the ministry and the Egyptian Travel Agents Association (ETAA). Additionally, the ministry has stressed the importance of regular technical inspections of tourist vehicles and adherence to designated routes for single-day trips. The ETAA has circulated a notice to all member companies, urging them to comply with these new guidelines, warning that violations could result in temporary suspension or complete revocation of the company’s operating license. Osama Emara, Executive Director of the ETAA, confirmed that the association received a formal communication from the ministry reinforcing the necessity of registering tourist vehicle drivers with the ministry, which includes medical examinations, training courses, and the issuance of an association card. He also highlighted the importance of regular vehicle inspections and the prohibition of using unregistered drivers.