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A Guide to Real Estate Market in Egypt

In the last couple of years, the property market has immensely benefited from the uncertainty and instability of post-revolutionary Egypt. As investors became jittery, the government introduced capital controls, which allowed money to flow into the property market. Even the demand for affordable properties went up, which is something you will notice when driving around some of the major cities, including Cairo, Alexandria, the Red Sea as well as Ain El Sokhna, with billboards all over advertising real estate. Despite fluctuations in currency valuations, the market has always held its ground and it’s still poised for steady and long-term growth, especially due to the implementation of a number of multiple forward-looking projects. Here are other interesting facts about the country’s real estate market:

Unique developments

There are 20 ‘fourth-generation cities’ under construction across Egypt today. These development plans include fully integrated services, infrastructure, and technology, which will certainly transform these areas into highly desirable destinations for property investors. Once they are done, these cities will be home to over 30 million people and will create millions of jobs. As a property investor, just think of the kind of opportunities these developments will present.

The transformation of Cairo

Among all the developments going on in Egypt, the New Administrative Capital, Cairo, is the biggest, and the one most investors should keep an eye on. To understand how big this is, it has attracted large investments from the government as well as private developers from all around the globe. The development has not only created new luxury housing options, but it has also contributed to the local economy through job creation. This is, in turn, leading to an increasing and sustaining demand for new and high-end commercial and residential properties. There are other new developments, such as the New Administrative Capital City, New Alamein City, New Cairo, and Mostakbal City, all of which are developing around the capital, and are creating luxury real estate opportunities.

The expected growth of foreign property investors

Egypt is gradually transforming, and with the anticipation of developments such as the New Administrative Capital, a lot is expected to happen, among them, attracting heavier foreign investment as well as a boom of the tourism sector. Now, the government of Egypt is the biggest landowner and had initially restricted ownership of land to Egyptians only. However, President Abdel Fattah el-Sisi recently removed the restrictions on foreign ownership, intending to boost the property market and to also enhance the recent development projects done in the country, particularly the New Administrative Capital. The President also allowed the land owned by the government to be utilised for public-private partnership schemes. All these measures are geared towards making Egypt an interesting destination for foreign investors, which it actually has.   

The entry of multinational firms into the market

The entry of multinational firms into the market plus the relocation of local businesses have seen the office sector continue to go up. Business offices within the gated residential developments in New Cairo caught the attention of some of the biggest organisations around the world. This led to an increase in rental rates, which was obviously expected.

Demand and supply for luxury

Even with all the development going on throughout the country, the demand for luxurious commercial and residential properties is still more than the supply. Heavy investments from private developers and the government have led the nation’s economy on a growth trajectory, especially considering that a lot has been done in the establishment of infrastructure that can sustain real estate growth. Moreover, according to Santander Trade information, the geographical location of Egypt, the dynamic growth of its economy, skilled workforce, labour costs, tourist attraction potential, large domestic market, substantial energy reserves, as well as all the success brought about by the reforms undertaken by the government, are making the country a highly desirable investment opportunity for many.

Other interesting facts

  • If you buy property today, the price will be low, but as soon as the development projects going are done, both construction and land prices are bound to increase dramatically.
  • If you pay for over ten years, it will be like you are taking a 10 year fixed loan in Egyptian pounds. So, if the currency devaluates, at it’s very possible it might, you will be paying less every month. Note that this option is available even to foreign investors.
  • Once the New Administrative Capital is ready for people to live in, and the tallest building in Africa is done, you can expect international awareness and publicity, and not forgetting that locals will also want to move in. This means that property values will go up.
  • With interest rates dropping, the property market will be boosted even more. It is expected that in the near future, banks will play an even bigger role in this growth. This is certainly a major catalyst for price growth.
  • The Egyptian government guarantees your investments. Yes, it may not be the most solvent government in the region, but still, an assurance by the state is a big deal, especially given that this is a priority project alongside strong political support.
  • If you are unable to pay instalments anymore, Egyptian law only allows you to lose 10 percent of the property’s price. The rest must be reimbursed by the developer.
  • When you decide to buy property in Egypt, the reservation agreement, as well as payment of the deposit plus the instalments, can entirely be done remotely, meaning that you don’t have to be in the country for the transaction to go through. You will only have to come during the key handover and to get the apartment registered in the cadastre.
  • If at one point you decide to sell the property, the developer can help you flip it.
  • Foreigners are seriously acquiring property in this New Administrative Capital, especially those from Europe – specifically the Gulf region and Spain.

Always do your due diligence

If you are convinced enough that you want to invest in real estate in Egypt, due to its high growth potential and opportunities, you have to do your research well so as to determine how such an investment fits into your overall portfolio. Make sure that you understand the regulations with regards to overseas investment, in this case, Egypt, and then conduct your search well to ensure that you get the best opportunity. If you can’t get all this information by yourself, you can seek help from local property agents. Such an agent might be your best bet towards understanding everything that you need to know about the property market in the country.