In what analysts described as a “kiss of life” for Egypt’s property market, the Central Bank of Egypt unveiled a 50-billion-pound ($2.97 billion) mortgage initiative on May 30. It is designed to enable Egypt's middle class to buy property, Sherif Samy, former chairman of the Financial Regulatory Authority, told Al-Monitor.

“This is a continuation of a previous initiative to provide those who cannot afford a mortgage to buy housing,” Samy said, referring to the Central Bank’s 2014 mortgage initiative.

The Central Bank introduced a mortgage finance initiative worth 10 billion pounds ($595 million) in February 2014 at an 8% interest rate for middle-income citizens. In 2015, the bank raised the initiative to 20 billion pounds ($1.19 billion). The loans are repaid at a reducing balance rate, with interest charged on the shrinking principal that reduces with repayment of each loan installment.

“Although mortgage funding is a key instrument for homebuyers, [there are] registration problems. Since a mortgage is an asset-based lending scheme, it is imperative to facilitate the registration of properties in Egypt to enable individuals to have access to the central bank’s mortgage initiative,” Samy said.