Egypt’s housing developers lift activity as demand rises

Reuters/Amr Abdallah Dalsh

• Number and value of residential projects completed in Q1 up 30%  
• Currency devaluation pushes up asking prices and rental costs
• Egyptians rushing to buy ‘in attempt to hedge against drop’

Rising interest in homeownership and a surge in development are expected to lift Egypt’s real estate sector this year, as currency devaluation keeps prices high. 

A report from data firm Property Finder said 17 residential and mixed-use projects with a total value of $1.3 billion were completed in the first quarter of the year – a 31 percent increase in volume and a 32 percent increase in value compared with the same period in 2022. 

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Around a quarter (24 percent) of the projects completed in Q1 are in Cairo, including the satellite cities New Cairo and the as yet unnamed New Administrative Capital.

Major projects in New Cairo include the $640 million Palm Hills-Fera site being built by Palm Hills Developments and the $200 million Katameya Dunes compound, from Cairo Investment and Real Estate Development.

Just over 660 buildings at Palm Hills-Fera were completed in Q1, according to Property Finder. 

The Giza governorate accounted for 18 percent ($108.5 million) of the delivered projects, including the $44.5 million second phase of Sodic’s The Estates compound in Sheikh Zayed City.

A total of 522 residential and mixed-use projects were under construction in the first quarter of 2023, the report added.

These were spread across 21 Egyptian governorates and, as of the end of March, 52 percent of them had crossed the halfway point in their construction.

Cairo accounted for 59 percent of the residential projects, followed by Giza with 15 percent.

“In Q1 2023 real estate in Egypt was marked by growing investments led by a rise in ownership and property developments,” Nervein Magdy, country manager of Property Finder Egypt, said. 

The average asking price for apartments rose by 30 percent year on year in Q1. The price for villas was up 25 percent.

Rental prices have also increased, with the average for both apartments and villas rising by 24 percent year on year, according to the report.

Property Finder attributed these rises to the impact of the devaluation of the Egyptian pound and the prevailing high inflation rates.

The pound has lost more than half of its value against the dollar over the past 18 months, inflation is soaring and millions of people are living in poverty. 

Buyers in Egypt “are rushing to purchase real estate in an attempt to hedge against the drop in value of the local currency against the dollar”, the report said. 

Despite the country’s economic woes, the real estate market "exhibits promising prospects", Property Finder said.

It pointed out that real estate and construction accounted for 17.2 percent of GDP in the fiscal year 2021-22, citing figures from Egypt’s Ministry of Planning and Economic Development.

The findings echo those of a Savills report into Egypt’s commercial property sector last month, which said demand remained buoyant and landlords were offering flexible terms to retain tenants.