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New Transparent Mortgage Laws Expected to Help Property Market in Egypt - 2 July 2010

The Egyptian property market remains “one to watch,” according to real estate agents, as the government revamps mortgage laws, making it easier for buyers to cut through the current bureaucratic red tape.

Mortgage lending in Egypt has been strict up until now; in 2005, only two mortgage companies were operating in the country. Even though Egypt currently has 11 mortgage companies—a sign that home financing has loosened in recent years—Egypt’s Investment Minister says he wants enforce new laws to help the sector become more efficient and transparent.

Under the new laws, which are expected to pass during the next parliamentary session, agencies could evict property owners who defaulted on their loans after six to seven months, instead of having to wait nearly seven years to do so like they must now. This would then free up the market for new buyers and prevent the economy from stalling out.

Egypt has already proven its economic strength, as it was one of the few countries to weather the recent global financial crisis rather well. Last year, it experienced a GDP of 5.25 percent, and in the next year, its GDP is expected to rise another 5.8 to 6 percent. Their steady economic growth and resiliency has also contributed to an increasingly more affluent middle class.

According to property experts, Egypt has been lauded as attractive investment alternative to markets in the Gulf. In recent years, many expats have shown interest in properties near the Red Sea coastline, particularly in the resort areas of Hurghada and Sharm-el-Sheikh.

To accommodate the growing number of people in the U.K. with holiday homes in Hurghada, airlines are beginning to create more flights to the area, including Jet2.com, which will start offering flights from Manchester this fall.

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