Home builders in Egypt may get a boost from proposals to streamline the country's cumbersome mortgage process.
The new guidelines from the country's Mortgage Finance Fund could cut the registration time for a loan from six months to one month, May Abdel Hamid, the agency chairman, told an Egyptian newspaper.
The agency is also setting up an electronic database to help the flow of information between lenders and consumers.
Anything that helps Egyptians finance home purchases is good news for local home developers such as Talaat Moustafa Group, Sixth of October for Development and Investment Company (SODIC) and Palm Hills Developments.
Laws setting up a system for personal mortgages were approved in 2001 but financing has barely made a dent in the market.
"It should be great for consumers," said Irfan Ellam, the vice president of equity research for Al Mal Capital in Dubai. "There is definitely demand."
The government hopes introduction of the new streamlined process will add 15,000 more mortgage customers in the next year. That may not sound like much but it's a 20 per cent jump from the current market of 75,000 mortgages.
The problem has been the abundance of red tape and wariness among financiers who placed high interest rates on loans, analysts say. After nine years, there are only 11 mortgage companies in the market. But that's up from two in 2005.
Beyond the bureaucratic issues, there are cultural aspects dampening the market, Mr Ellam said. Couples tend to wait until they get married to buy a home and then only after they've saved sufficiently.
Loosening mortgage regulations would "make property easier to buy and more affordable", Mr Ellam said.
Development of a larger mortgage business may not dramatically boost sales in the short term but it could help housing companies obtain financing, he said. Lenders would feel better about the market, knowing more consumers have the potential to buy, he added.
Home builders in Egypt have had mixed fortunes over the past six months. Talaat, the largest builder, has been flat after dipping in September when a court ruling threatened to raise the price of land. But SODIC's shares have jumped 20 per cent in the past six months, in part due to sales in its Allegria development outside Cairo.
