May 27, 2022

Analysis: Real estate market in Egypt

How is the real estate market in Egypt?

The real estate market in Egypt is a broad and multi-field concept, and here we must take a deeper idea about the main points that make up the real estate market in Egypt:

1- Real estate is so influential sector for the Egyptian economy, as real estate represents about a "third and a half of a third" of the wealth of Egyptian families from the middle and high-income classes, and even more than that for the low-income class. In addition, indicators of the success of the future of real estate investment in Egypt are witnessing a doubled growth in its revenues at the level of the Egyptian Stock Exchange, as the real estate sector has grown by more than 20 percent recently, and its total contribution to the GDP has exceeded 10 percent.

2- The real estate market in Egypt is not a "single homogeneous sector" across the country, as this market is "divided geographically" between Cairo, the coastal areas, and the rest of the regions throughout Egypt. Most discussions about real estate focus on the first and second categories while the rest of the market does not get enough coverage. The real estate market in Egypt can be divided in another way in terms of category, where we find luxury housing, luxury apartments, medium housing and social housing. The last three categories of this division receive less attention, although they are very profitable, and are considered one of the indicators of the success of the future of real estate investment in Egypt, as it is a golden and guaranteed opportunity.

3- The real estate market in Egypt is going through a "bubble", as the rate of increase in real estate prices is much higher compared to the rate of increase in construction and finishing costs. These prices feed the investment objectives and not the real demand to move or upgrade. This "bubble" is exacerbated by the sharp decline in the value of the Egyptian pound, where real estate acts as a store of value, while the value of the currency has historically depreciated, and with high inflation rates, the return has become negative, which opened the way for installment facilities and loans.

4- The marks of the real estate "bubble" in Egypt are very clear, and as a result more focus is being placed on middle-income projects, as they offer smaller units to respond to the increasing demand in this sector. Various payment facilities are also offered in installments over 10 years in some cases, even without a down payment.

5- The great growth in the real estate market in Egypt is not new, as this sector has witnessed increasing growth with the passage of time and has not been exposed to any crises or collapse. In the worst case, there was a kind of slowdown without a decrease in the nominal prices of the units.

6- The current dynamic experienced by the real estate market in Egypt today, due to the increase in the proportion of land offered by the government to establish housing projects in order to bridge and support its budget deficit, which has greatly increased the volume of real estate investment in Egypt.

How is the real estate market in Egypt? What are the indicators of the future success of investing in the real estate market in Egypt?

There are many positive indicators that make the real estate market in Egypt a permanent place for work and investment, due to clear factors today:

• The increasing demand for real estate.

• A portion of the market is not fully covered.

• Competing real estate investments for dollars and gold.

• Significant material gains from this sector