Egypt's New Urban Communities Authority is planning to introduce a new package of financial concessions in January to support property developers, primarily by reducing the interest rate on land installment payments. The move aims to combat a recent slowdown in developers' unit sales, a source familiar with NUCA's land tender process told Al Manassa.
NUCA, which was established in 1979, typically sells land to developers through installment plans, requiring a down payment of around 10% of the land's value with the remaining balance paid over ten years.
The source, who requested anonymity, indicated that the current interest rate charged to developers on land installments stands at 15%. NUCA is discussing a potential reduction to between 11% and 12%. This cut is being considered as stagnant unit sales make it increasingly difficult for developers to meet their financial obligations, which include the land installments and the accrued interest.
The source also noted that NUCA is exploring other facilitations linked to adherence to green building standards. These incentives could include fast-tracking the issuance of building permits, offering real estate tax reductions, and granting exemptions from certain fees. The objective is to encourage the use of sustainable materials, reduce waste, and improve energy and water efficiency in construction, the source explained.
This focus on stimulating demand and easing financial burdens coincides with the wider construction sector's struggle against market conditions.
Earlier this month, major steel companies, including Ezz Steel, Suez Steel, and El Marakby Steel, reduced rebar prices by approximately 4,000 Egyptian pounds per ton to counter the current sales slump, as Ahmed El Zeini, head of the Building Materials Division at the Federation of Egyptian Chambers of Commerce, told Al Manassa on Monday.
The planned easing follows a recent period of increased enforcement by the authority. In July, 123 real estate development companies entered negotiations with NUCA to legalize their land status in the Northwest Coast region. These firms had reportedly violated allocation terms, most commonly by failing to make two consecutive installment payments on the land value.
Subsequently, in August, NUCA—represented by its city agencies—began formally notifying property developers that they had 30 days to settle delayed installments and late fees. The communications warned that land would be repossessed from companies that failed to comply.
Later, following lobbying from dozens of real estate developers, the NUCA suspended enforcement of the land reclamation decisions.
