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Developers & Egyptian Payment Plans

Discussion in 'Egypt property' started by propertyborders, Jan 11, 2008.

  1. propertyborders

    propertyborders New Member

    Hello do you think the payment plans in Egypt will mature as they have in Morocco where I specialise in? at the moment in Morocco there seems to be 2 types of plan see below.

    For example if you look at the typical the typical development in Morocco you will find the payment plans are 20% on contract 20% on start of build 60% paid by mortgage or cash on completion

    2nd payment plan would be 15% on contract and then a further 10% the remainder of 75% is then usually paid by mortgage or cash..

    I and most of my buyers & investors seem to prefer this type of payment plan as it is gives the buyer more time to save there money. It also helps if you are trying to gear your money i.e using the banks money not your own.

    Does anyone think that the payment plans in Egypt will change? or does anyone know of payment plans that don't require so much money up front?

    What are the best payment plans on the market?

    I look forward to your responses.
  2. dave99

    dave99 New Member

    Open to suggestions

    "Maturing" is not the word I'd use in this context. Different sure.

    I have a "standard" payment plan, very similar to many others developers in Hurghada but so far not a single owner has used it.

    Being the person that decides everything makes it easy to work out an individual payment plan for everyone.

    If someone wants to pay most of the money "up front" then there's a discount, if a buyer wants to pay most towards the end of the build period then no discount - anything in between we can work out a "deal" that suits us both.

    Simple really - maybe other developers don't offer this flexibility - maybe someone can offer their knowledge.

  3. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    In the absence of mortgages the only option open to clients is to pay for the property during construction in one form or another. The most important payment is the 30 or 40% on contract as this covers most of the Developers costs. Most will be flexible beyond this. In the case of completed apartments some will even hand over the keys with 50% paid and wait up to a year for the balance!
    In Spain the classic payment scheme was 30% on contract 70% on mortgage; this then got diluted with many Developers opting to reduce the contract money to as low as 10% with a further 10% after 12 months and the balance by mortgage on completion. However, with the market now in serious difficulties banks have tightened up on lending criteria and the 'no money down' system preferred by many UK investors is getting harder to achieve.
    Cyprus has a good system; one Developer asks for just 5% on Contract, 5% on completion and the remaining 90% by way of a Swiss Franc mortgage at under 4% interest. In this case the mortgage is cleared prior to contract and the Developer can immediately begin to 'draw down' on the mortgage. Interest costs incurred are added to the mortgage and paid over the term.
  4. lyes

    lyes New Member

    hi, this our payment plan for the Hyde Park project in New Cairo, the complation is for 2012,
    - deposit 10% upon signing the unit reservation form,
    - 1st installment 10% within 4 months of the reservation,
    - 2nd installment 10% within 6 months of 1st installment due date,
    - 3rd installment 10% within 5 months of the 2nd due date or completion of 5% of construction works in the cluster whichever comes earlier,
    - 4th installment 10% on completion of 15% of construction works in the cluster,
    - 5th installment 10% on completion of 25% of construction works in the cluster,
    - 6th installment 10% on completion of 40% of construction works on the cluster,
    - 7th installment 10% on completion of 60% of construction works on the cluster,
    - 8th installment 10% on completion of 80% of construction works on the cluster,
    - 9th installment 8% on completion and the 10th installment 2% on completion of snagging and hand over.
  5. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    Thankyou for this; we've heard a lot about Hyde Park so now we know the full terms of payment. It looks great - will you be working in Cairo?
  6. propertyborders

    propertyborders New Member

    This is great guys keep the payment plans coming.
  7. queenie40something

    queenie40something Senior Member

    Hi - payment plans for Sierra Sharm are

    35% deposit
    65% over 18 months in 6 postdated cheques
    10% discount on 100% cash payment upon signing of contracts
    10% discount for investors for a whole block sale of 6 units and above
    15% discount on 100% cash payment for middle and ground floor

    For Sharm Bride

    30% deposit
    70% over 24 months
    10% discount on 100% cash payment upon signing of contracts
    5% discount for a whole block

    Carlton Resort Sharm

    35% contracting deposit .
    65% payment over 36 months to be paid by postdated quarterly cheques
    10% discount on 100% cash payment upon signing of contracts.
    10% discount for buying a whole building for investors
    Delivery 24 months starting from contract date

    Las Cabanas Marsa Alam

    25% deposit, Balance remaining will be paid over two year's interest free.
    7% discount for 100% cash in advance payment.
    Special prices for multiple/corporate purchases.
    Delivery will be after 24 months from the contracting date
  8. dave99

    dave99 New Member

    Anybody had any BESPOKE payment plans

    By this I mean something not normally on offer - specifically to suit your personal circumstances

    For example:

    10% deposit then balance in 6 months or something.

  9. propertyborders

    propertyborders New Member

    Why Dave is this something you are offering??
  10. dave99

    dave99 New Member

    Small enough to be flexible - so anything goes (almost)

    This is a simple general question since I tried to do something a bit different once upon a time and got nowhere, so now that I'm the person who decides all the Ts & Cs I make a point of being flexible.

    I'm sure there are other developers out there who "vary" but I suspect the bigger players are the least flexible - no idea really hence the question.

  11. kimkonnoris

    kimkonnoris New Member

    regardng payment plans

    i didn't realise there were different payment plans available, I assumed that you paid a small deposit then the balance in a few months time. I will have to look into this, as i might be able to buy a more expensive perminant home in the summer.
  12. Peter Mitry

    Peter Mitry <B>Egypt Forum Founder Member</B>

    Payment plans are improving all of the time; there is one new project offering 25% on contract with 15% during the four year build and a 60% Dubai mortgage on completion. Another is spreading payments interest free over the two year build time.

    The initial payment is usually between 25 & 40% but most Developers will be flexible on the balance.
  13. dave99

    dave99 New Member

    Every payment plan could be different

    With only 20 or so payment plans to keep track of it's possible to do a different plan one for everyone.The more interesting

    The point is that there are times when, from a cash flow point of view, I may be happier to say, take a large upfront payment with a good discount, or it may suit me better to go INTEREST FREE for 12 months with small deposit and monthly payments, with a small amount after completion.

    The more interesting ones are where the new owner has a lump sum due at a fixed point in the future so the plan will take this into account when calculatiing the initial discounted price.

    Last edited: Feb 5, 2008
  14. NeilHollingsworth

    NeilHollingsworth New Member

    WWD payment plans are 10% reservation, 30% on contract and then 60% on completion and they have two banks looking at providing mortgages. In fact they have over 20 mortgage applications in and are expecting to get them very soon. This will make them a forerunner in the Egyptian property market.
  15. NoMoreHotels

    NoMoreHotels New Member

    Custom Made, Bespoke Payment Plans

    Everthing is negotiable, for example;
    Have client has purchased via our agent network 2 studios, has paid 30% upfront, is going to pay another 30% over 12 months on Interest free payments. Will have mortgage pay the balance of 40% and then recieve cashback of 25% as mortgage offers LTV of 65% with interest rates at 6.5%, pretty good going.
    Nothing is ever set in stone don't feel your circumstances or financial liabilities are restricting you, talk to your agents as nothing is impossible.:)
  16. lyes

    lyes New Member

    Good morning,
    we have a good conditions with CIB for the Hyde Park

    1) Mortgage can be extended to Egyptians living abroad or non-Egyptians living in Egypt with valid work permit.

    2) Mortgage house can finance up to 80% of the value of the property (the customer has to pay the first 20% and then the CIB will finance).

    3) Interest rate is 11.5% for the first five years and 12% years after.

    4) Mortgage to go up to 15 years.

    5) Customers can choose to either pay escalating installments, fixed installments or pay the interest first and then principal (the later is good for investors)

    6) Arrangement fee is 1.5% of the value of the loan (paid once at the initiation of the deal).

    7) The customer should make a life insurance with the value of the loan and make the CIB as the beneficiary under this policy.

    8) We can finance in LE or US$ (however, in US$ financing, the customer must prove that he/she has income stream in US$).

    9) We can finance employees and self employed as well (however, for self employed, they can finance up to 65% of total value of the property).

    10) Customer will receive (on the spot) a preliminary approval on the loan amount and schedule of monthly payments, providing that all information he/she gave to the Mortgage house if correct and providing that he passes the medical test "for life insurance considerations").
  17. Mark .Y.

    Mark .Y. New Member

    Can we get away from this talk of "interest free" payments. As a general rule (and I know there are a couple of exceptions for very small percentages) the full balance is paid by the time you receive the key to your apartment.
    You are not getting anything interest free as you have paid up front already, what you have done is lost interest on your capital.
    You don't buy something like a large TV over here on a 12 month interest free package and not actually get the TV for 12 months do you.

    Sorry, getting on my wick this one - rant over !!!

    Mark .Y.
  18. WESTMIDS33

    WESTMIDS33 Banned

    Nothing is free in life

    Hi Mark Y,

    I agree with you. You pay most of your money upfront usually 40% and then remainder over a period of time or on completion again around 2 years.

    As for mortgages this debate will go on and on until we have an official statement from one of the BIG Lenders eg HSBC. My advice to people wanting to borrow is do it only if you can afford it and that would be by way of remortgaging any equity in your house or a simple loan. Suggestions that mortgages in Egypt are cheaper is wrong and misleading. On this thread we have had 11.5% quoted which is almost double what you would pay in the UK.

    There you are my rant over too.


  19. dave99

    dave99 New Member

    Is Anyone increasing prices during the building phase on signed contracts

    From what I've seen the "interest free" offer is technically true since there is no extra to pay, but there is obviously a loss, either from borrowing or in loss of interest on savings withdrawn - what you do get hopefully is a fixed price in a rising market. There is also likely to be an amount, maybe between 5% & 10%, that is not paid until 4 to 8 weeks after completion - which clearly is interest free if the price is fixed.

    Has anyone had to pay a higher price than initially quoted - seems that it happens in other countries !!!
  20. awahee123

    awahee123 Banned

    The top and bottom of this is, buying off plan gives the developer a fair chunk of your money to start building the development.
    Once the resell market kicks in here the developers may have to think differently.
    It isn't a buyers market a the moment if you see what I mean.
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