lundi 30 septembre 2019

Egypt's rate cut helps revive real estate sector

Hesham Talaat Moustafa

(USD = 16.52 Egyptian Pounds)

CAIRO (Reuters) - Lower interest rates in Egypt will help revive the real estate sector and boost demand, said Hesham Talaat Moustafa, managing director of Egypt's largest listed developer, Talaat Moustafa Holding.

Egypt's central bank cut key interest rates by 150 basis points on Thursday for the first time since February. The overnight deposit rate fell to 14.25 percent from 15.75 percent and the overnight lending rate to 15.25 percent from 16.75 percent.

"The rate cut is a positive decision that will have an impact on the recovery of the sector and increase demand for purchases," said Mustafa.

“Interest rate cut entices investors into financial instruments to move into the real estate market.”

Many real estate developers in Egypt have suffered from the slowdown in demand for luxury housing units recently, which has led companies to devise new marketing methods such as increasing the repayment periods to between 10 and 15 years, among others.

While the number of contracts and sales of a large number of sector companies fell, Talaat Moustafa Group's contracts amounted to 21.3 billion pounds ($ 1.29 billion) in 2018 compared to 13.1 billion pounds in 2017. The group targets contracts worth 24 billion pounds in 2019.

The company's most prominent projects in Cairo are Rehab City and Madinaty East Cairo project, which is built on an area of ​​8,000 acres.