30 - Talaat Moustafa Group

TMG ANNUAL REPORT 2008 27Market OverviewIncreased affordabilityA developing mortgage market in Egypt coupled with TMG’sown arrangements for mortgage financing are increasing theaffordability of TMG’s units and thus ensuring a sustainable andgrowing demand for its residential housing products.Mortgage financing is currently being offered by at least six entitiesin Egypt, in addition to banks, while the number of dedicatedmortgage finance companies is expected to increase gradually.In September 2008, the total value of outstanding mortgageloans reached EGP 3 bn compared to only EGP 202 mn in 2005with an average loan size of EGP 165,000. Government initiativescurrently underway to support mortgage finance are expected tofurther enhance the Egyptian mortgage market. These initiativesinclude a recent reduction in interest rates by the Central Bankof Egypt, along with structural reforms undertaken by thegovernment to further boost the real estate industry in Egypt.Annual Supply and Demand for Residential Units in Urban Areas Broken Down by Type3500300025002000150010005000Banks Mortgage Finance Companies Cumulative Growth220% 227%206%184%141%330%295% 302% 306%255%1510 156314891014728 753631640500491325177 214 240 272 314 355 396121 87348%209718041012831Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08400%350%300%250%200%150%100%50%0Egyptian Tourism IndustryTourism is a fast-growing economic sector, with an average annualgrowth of 25 % in arrivals and 32.5% increase in receipts over thepast four years. Some 13 million people visited Egypt, generatinga total revenue of approximately US$ 10.6 bn in 2008.Egypt's tourism sector is considered amongst the most dynamicand influential sectors in the Egyptian economy. It is rankedamongst the nation's top generators of revenue and to estimatedto provide 13% of jobs in Egypt's total workforce.The global financial crisis has posed a particular challenge tothe tourism sector in Egypt, since the tremendous growth in thesector over the past few years had been expected to continue.Nevertheless, the country is still expected to be among the fewthat will escape the full impact of the crisis, and tourism is expectedto remain within the range of what might have been expectedfor 2009.Egypt represents 4% of the annual increase in international touristflows, and the government through the ministries of tourism andaviation has intensified its efforts to retain Egypt's share of theinternational market.Fortunately, Egypt is considered an affordable close destinationby many European and Arab tourists, who form a majority ofEgypt's tourism market, and this means that they may chooseEgypt over domestic tourism destinations despite a reduction intheir disposable income as a result of the crisis.