Ahmed El-Shennawy, a member of the Construction Committee at the Egyptian Businessmen Association and CEO of ADFA Real Estate Development Company, said that the real estate market needs to be reorganized and new tightened controls must be set to confront randomness in the market.
Al-Shennawy added that the recent period has witnessed the emergence of many real estate development and marketing companies and brokers who are not serious.
This prompts all parties to confront this type of companies and prevent them from operating in the market, as they have caused great harm to the real estate market and negatively affected the relationship between real estate development companies and customers.
The Chairman of the Construction Committee emphasized that the only solution is to introduce licenses for the work of these companies and a system for evaluation should be enacted so that the customer can ensure the seriousness of the real estate marketer and can evaluate the service so that the state can control this market.
Al-Shennawy noted that the commissions of real estate marketing companies increased by rates ranging between 10% and 12%, while the commission should not exceed 2 or 3%, as a result of the presence of companies operating in the market without experience in the real estate development sector or a specific strategy, which causes direct harm to the sector and causing a crisis of confidence.
He revealed that real estate marketing companies that place high commissions on selling prices of residential units lead to fluctuations in the prices of the real estate market.
"These commissions are considered to be greatly exaggerated ones, and these companies do not study the market prices before determining the commission", he said.
Al-Shennawy said that the real estate market has recently witnessed a new marketing system from real estate development companies, which called "cash back", and it allows the customer to pay the unit price over 8 and 10 years, while leasing the residential unit to the customer after the second year of paying the installments by financing their installments.
He called on real estate development companies that allow the "cash back" system to provide a clear and specific vision, and what is the company's profit and the profit margin achieved for it from this system.
He went on to say that there are many questions about the possibility of companies using circumvention mechanisms, including overpricing to ensure the target profit margin.
He indicated that the real estate market needs each party to fulfill its mission within the framework of clear and recognized mechanisms.
Contributed by Ahmed Moamar
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