Ahmed Samir El-Desouky, Chief Commercial officer at ADC Developments, stated that high cost of constructions and its impact on selling prices in return for the stability of purchasing power of customers requires support for those customers, which could be done through multiple mechanisms. Besides, flexibility of real estate companies in dealing with market changes to maintain continuous sales.
El-Desouky elaborated that these mechanisms include; innovating new marketing mechanisms for customers through which flexible payment plans are offered to suit clients and the company, or a special discounts on cash or a short payment period.
He pointed out that customer confidence and trust in a company and its previous work will be decisive elements in customer’s choice of company from which he purchases. Moreover, the good choice of developers for management or operation company for their projects, in order to ensure seriousness and commitment in developing, would help in building confidence between customer and real estate company.
Furthermore, these mechanisms should include active and effective mortgage finance system and its increasing role supporting customer to buy residential units, he explained.
He pointed out that mortgage financing is the link between purchasing power of customers and prices of real estate units, disclosed that it is an essential method that companies in all countries of the world depend on for all residential segments.
El-Desouky added that there are strong efforts from the government to revitalise mortgage financing, but there is a need to facilitate procedures to customers as well as increase fund allocated for purchasing a unit.
He said, “Real estate companies will move towards more exploitation of available spaces within units in order to control construction cost and offer units at affordable prices,”
He expected that prop market would see price increases ranging between 10 and 15% during the coming period, accordingly real estate companies may resort to diversify their financing channels in the coming period, such as bank borrowing, in order to support construction of its projects.
Real estate investment companies that executed constructions before marketing or in parallel with marketing units did not encounter the gap between execution price and selling price, meanwhile, companies that were late in constructions face a huge gap that requires strong efforts to bridge this gap, maintain the continuity of their business and fulfill their contracts with clients, El-Desouky concluded.