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5. Financial Transparency
5.1 Market Stability
5.2 Independent Asset Valuers
5.3 Data Standards
In-Country Assessment Information

5. Financial Transparency

Goal – A well developed and transparent financial system that includes strong supporting institutions and highly trained and ethical professionals that contribute to effective financial intermediation and deep and broad access to capital and financial services

 

5.1 Market Stability

Core Question:         Are market risks sufficiently transparent and diversified so that efficient capital allocation can occur? No – Weak – development is still hindered by bureaucracy and a cash-based economy.

 

Financial Reporting

5.1.1   What is the strength of the country’s auditing and reporting standards?  Weak – 73rd out of 144; Score 3.8 out of 7

 

Market Sophistication

5.1.2   What is the overall level of financial market sophistication in the country? Weak – 88th out of 144; Score 4.2 out of 7

Source: The Global Competitiveness Report 2012-2013, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

 

Insolvency Process

Weak – Ranking – 94th out of 183

5.1.3    What is the average time to complete bankruptcy proceedings? 4.2

5.1.4    What is the cost of bankruptcy proceedings as a percentage of the estate? 22%

5.1.5    What is the recovery rate of bankruptcy proceedings?  17.6 cents on the dollar

Source: Doing Business 2013 – Resolving Insolvency

http://www.doingbusiness.org/data/exploreeconomies/egypt#resolving-insolvency
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5.2 Independent Asset Valuers

Core Question: Do trained, independent and ethical asset valuers exist for all types of assets? No, Weak.

 

Survey Questions

Standards

SQ 21  How easy is it to find a valuer who implements International Valuation Standards? Weak.

 

Training

SQ 22  What is the level of training of valuers? Unknown.

Civil Society Resource: International Real Property Foundation www.irpf.org

 

Ethics

SQ 23  Are opinions offered by valuers free of influence from parties to the transaction?  Unknown

Civil Society Resource: International Valuation Standards Council www.ivsc.org

 
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5.3 Data Standards

Core Question:   Is accurate property information available electronically in formats that are consistent with international standards? No, Very Weak.

 

Survey Questions

Sales & Operating Data

SQ 24  A multiple listing service is an electronic exchange system where brokers and agents can widely share contracted real estate listings of properties that are for sale. Do multiple listing type services exist? No, Very Weak.

Civil Society Resource: International Consortium of Real Estate Associations www.worldproperties.com

 

SQ 25  Do resources exist for obtaining building income and expense estimates? No, Very Weak.

Civil Society Resource: Institute of Real Estate Management www.irem.org

 

Interchange Formats

SQ 26  Do electronic data interchange formats conform to international standards (ebXML – electronic business using extensive markup language)? No, Very Weak.

Civil Society Resource: Open Standards Consortium for Real Estate International www.oscre.org

 

Technical Standards

SQ 27  Do building codes and office building measurement standards (ANSI/BOMA Z65.1) conform to international standards? No – Very Weak

 

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In-Country Assessment (as of 2013)

Market Stability

FQ 9.           How stable has the property market been over the last several years?

Uncertain. It is said that international economy does not sway Egyptians’ trust in the Egyptian real estate market. The only way to affect the market is for the government to force the value of properties down. In such case, investors simply hold their real estate.

Immediately after the revolution, for a few days a lot of development took place without the government’s consent. But the government soon became aware and stopped the processes.

The Egypt property market was in a year long recession heading into 2006. The market was hit because of the threat of terrorism and other economic and political factors. The short term rental property market in Egypt has been giving investors the best returns so far. However, with new legislation being introduced to make it easier for overseas buyers to purchase housing in the Egypt property market is will not be long before the real estate sector in this ancient land catches up to its short term rentals market.

Source: Egypt Property Market – http://www.investorsprovident.com/africa/egypt/egypt-property-market.html

 

Valuation Profession

FQ 10.         How many independent valuers exist in the market?

 

FQ 11.            How many companies exist and what is the average size of valuation companies?

 

FQ 12.            What are the valuation standards and do they conform to international and regional standards?

 

FQ 13.         What valuation methods and techniques are used in the market?

 

FQ 14.            Are there valuer associations in the market? What number and percentage of practitioners belong?

 

FQ 15.            What training programs are available to upgrade the quality of valuers?

 

FQ 16.            Are peer review mechanisms in place to assist in enforcing ethical behavior?

 

FQ 17.         What is the quality of valuation reports?

 

Data Availability

FQ 18.  What is the status of proprietary data bases that include property information?

Data is not available; not even by the government.

 

FQ 19.  What is the status of existing data sharing mechanisms for properties that are for sale?
Information is passed by word of mouth. The typical venues are local coffee shops or by inquiries with building janitors.

 

FQ 20. Do valuers have an established data sharing mechanisms? None known

Source: Egypt Field Question from Lin Mao

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