A mortgage law recently approved by the Egyptian Parliament is expected to rescue the real estate market from more than three years of stagnation, according to the weekly Middle East Times.
The recent passage of the law was preceded by a failure to pass a similar bill in late 1998.
At that time, the draft legislation was withdrawn after the Grand Sheikh of Al Azhar, Muhammad Al Sayyed Tantawi, condemned mortgages, because he considered them interest-bearing loans, or usury (riba) and hence haram (forbidden by Islamic law).
The Egyptian mortgage law is based on the British mortgage system, where one can buy property and pay back the loan within 25-30 years. Around 100,000 couples get married annually in Egypt, creating huge demand for housing units all over the country, especially in Greater Cairo, which is home to about 20 million people.
Therefore, it is expected that having a law covering mortgages will greatly stimulate the construction industry and sale of housing units, which in the past were typically purchased with cash, said the weekly.
It is estimated that in the Cairo area alone, there are already some one million new unsold housing units awaiting a mechanism for buyers to finance their purchases.
"I have been engaged for three years and I cannot afford a flat now because owners always want to get paid in a lump sum and I don't have EP100,000 ready to be paid for a flat now," said 29-year-old Ahmed Muhammad, a computer engineer.
"I think the law will help a lot of people get a loan and pay about EP800 a month, which I can afford," he said.
According to the weekly, some estimates put the number of unoccupied housing units in Cairo at much more than one million. Housing expert and former cabinet minister Milad Hanna was quoted as saying that 25 percent of Cairo's housing stock is unused. Owners of buildings "have been unable to take advantage" of their properties, he said.
Most of the huge number of unused apartments were built in the early 1990s – Albawaba.com
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