Egyptian ministry faces budget challenges in financing housing programme

Abu Dhabi: The Egyptian Ministry for Housing Utilities and Urban Communities is facing challenges to finance the first phase of a housing programme for low income groups, according to its minister, Mostafa Madbouly. The project is still short of around 16 billion Egyptian pounds (EGP) (Dh8.2 billion), he said.

Speaking at the MEED’s “Invest in Egypt” conference in Abu Dhabi on Thursday, Madbouly said that the construction of 230,000 units for phase one requires a total of EGP22 billion, of which EGP6 billion came from the government.

“We are currently implementing the largest housing programme in the world for low income groups. It is the construction of one million housing units in five years. We are already constructing 230,000 units, and 52,000 units have been finished and announced. This project is fulfilling one of the goals of the two revolutions in Egypt over the past few years,” he said, adding that each unit will be sold for EGP135,000.

The minister further said that the development is a part of efforts by the government to increase supply of housing units in the property market where, despite a slowdown in overall economic growth, demand remains high.

According to Madbouly, the residential real estate market needs 500,000 housing units per year to meet rising demand. He added that the market has maintained its value, seeing an increase in prices due to higher demand across all income groups. There is also a huge deficit of nearly three to four million square metres of office space.

“We are studying [the idea] of banning the development of administrative office space in downtown Cairo within five years. We will direct all these [developments] to new cities around Cairo as part of a scheme to distribute congestion,” he said.

Madbouly also discussed directing more tourism towards the coastal city of North Coast, saying that there are governmental plans to create a tourism centre there that will look like Sharm Al Shaikh, and Hurghada. The minister said that development in the city can eventually allow it to house 30 million people.