EGYPT. Egypt is going to implement a new unit-based central real estate registration system in urban areas. The first phase should cover nine urban communities comprising New Cairo, 6th of October, Nasr City or Dokki and is planned for implementation during fiscal year 2006-2007.

The second phase will cover areas such as 10th of Ramadan, Northern Coast, Hurhgada or Sharm El-Sheikh. Recently, four bids have been approved by the Egyptian Ministry of Administrative Development in the assessment of technical proposals for the project. These companies have qualified for the assessment of financial proposals due later this month.

The companies bidding to implement the system are IBM Egypt, Raya Holding, Advanced Computers Technology and Siemens Egypt. The aim of the new registration system is to register 22 million real estate units to guarantee ownership stability and stimulate the real estate finance market.

Also in the second wave of Egypt's fiscal reforms is the slow process of mortgage reform. Minister of Investment Mahmoud Mohieddin visited the US recently to promote investment in Egypt and he met with 14 representatives of financial institutions, funds and investment companies.

Mohieddin also met with real estate financing companies and invited one company to seek partnerships in the securitization of mortgages in Egypt as well as insurance for real estate.

The government has been keen to encourage mortgages since the reform of the real estate laws several years ago, but such efforts have been constrained by the drawn-out property registration procedures and high registration fees and property taxes.

Mohieddin said that a law is being proposed to Parliament to limit property registration fees to a maximum of LE 2,000. The current registration fees are 3% of the value of the property with no limit. Minister of Finance Youssef Boutros-Ghali is also expected to reduce taxes on property following his substantial reform of the income tax system.

The existence of a secondary market for mortgages, for which securitization is a first step, will serve to encourage a primary mortgage market.

Overseas Private Investment Company, an agency of the US government that supports American private sector investment in the developing world, is considering investing mortgages in Egypt in either the primary or secondary market, and is working in coordination with the Mortgage Finance Authority on this.

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