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Egypt's real estate is historically well equipt in times of crisis

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Strong investments and a growing population Egyptian real estate in a healthy position. Yet, improvements to regulations are needed to strengthen this.

Due to rising inflation and the increasing cost of building materials, property prices in Egypt will undoubtedly rise during the next four months. As a result, developers will be forced to raise the price of available apartments for sale.

Egypt’s population is growing by 2 million people (or the equivalent of 1.9%) per year. This continues to facilitate a strong demand for residential real estate at all price ranges. Additionally, there is a high demand for commercial and administrative real estate from investors on both a local and international level. This demand is particularly strong in the New Administrative Capital. But equally, the real estate market in West Cairo in addition to Sphinx Airport will benefit from the establishment of the Grand Egyptian Museum.

THE NEED TO IMPROVE REGULATIONS IN EGYPT’S REAL ESTATE MARKET

Egypt’s real estate market lacks a robust regulatory environment. This is particularly the case when compared to other MENA regions, such as Bahrain and Dubai, which already have completely functional RERA. So, to enhance its competitiveness on not just a regional, but also a global scale, there is still room for improvement to enhance regulations in Egypt’s real estate sector.

For example, investor-friendly laws in Dubai such as its strong property advertising restrictions and extra transaction reporting obligations position the regulatory environment in Egypt as inferior. So, additional regulations not only from a governmental standpoint but also from a developer-to-buyer perspective need to be enforced in Egypt’s real estate market. This is according to the words of the Head of Savills Egypt, Catesby Langer-Paget.

However, recent moves towards a more innovative and digitalized real estate experience have been undertaken. This is in line with Egypt’s Vision 2030. For example, the Digital Egypt platform and legislation to ease this process have been introduced. This is facilitating innovation in Egypt’s real estate sector with the rise of proptech start-ups within a digital transformation.

STRONG INVESTMENT IN NEW EGYPTIAN REAL ESTATE DEVELOPMENTS

Cairo has historically not prioritized property maintenance, which is crucial to preserving its worth. Developers have instead recently started to invest more in high-quality property management for retail and office buildings as they concentrate more on commercial real estate.

Heavy investment in new developments within Egypt's real estate market equally provides a positive outlook for the industry. Large-scale developments such as the New Administrative Capital or Tarboul Industrial City amongst many other developments are clear examples of the sheer extent of investment. This is all part of the Egyptian government's Vision 2030. So, these projects are set to revolutionize and innovate Egypt's real estate environment. Thus, creating a significantly attractive property market for both Egyptian nationals and investors, but equally for investors on an international scale too.

Egyptian real estate prices have historically outpaced inflation and have done well even during uncertain economic times. So, in addition to the large scale of new developments and investment into Egyptian property, the market is in a favorable position to weather the storm of the looming global recession.

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