The Egyptian legal system provides protection for real and personal property, but laws on real estate ownership are complex and titles to real property may be difficult to establish and trace. The Nazif government is moving to modernize laws on real estate ownership and tenancy. There are price controls on older residential and commercial real estate property resulting in apartment rents as low as $10 per month. These rent controls do not apply to real estate put into service in recent years. There are no restrictions on foreign ownership and rental of non-agricultural real estate in Egypt although specific procedures are required in some cases depending on the geographical location and building codes in different governorates.
The mortgage facility in Egypt remains underdeveloped. In June 2001 the People’s Assembly passed Real Estate Mortgage Law 148 for 2001. The law allows both banks and non-bank mortgage companies to issue mortgages and provides, for the first time under Egyptian law, clear procedures for foreclosure on property of defaulting debtors.
In May 2002 Parliament approved amendments to the Banks and Credit Law that facilitated mortgage activities in banks and lowered property registration fees. Real estate registration fees were again lowered in 2003 and early 2004. The mortgage law established a General Authority for Real Estate Mortgage Affairs to regulate real estate mortgages in Egypt. Amendments to the existing Capital Market and Real Estate Mortgage laws passed in June 2004 allow the issuance of mortgage-backed securities. Two real estate finance companies were established in the first half of 2004 and one of the two companies has started issuing mortgages in the second quarter of 2004 but it is still too early to tell how well this law will allow an efficient mortgage market to operate in Egypt. |
