admin, Author at MNG Egypt

The real estate market is full of changes that affect the prices, the behavior of buyers or renters, the flow of investments, and most importantly our decisions.

When seeking insights about the market, one may acquire preliminary information from magazines or through informal channels such as friends. Nevertheless, decision-making necessitates reliance on evidence and data-driven analysis.

This is where Market Watch report by Property Finder emerges as a reliable resource. It brings you a full analysis and insights about Egypt’s market in Q1 2023, according to our data.

Highlights

Find below the highlights of the market during the first quarter of 2023.

Egypt witnessed a rising demand for property ownership, driven by currency devaluation and construction costs.
The residential and mixed-use real estate sector recorded 522 ongoing projects worth USD 309.9 billion
17 projects with a combined value of USD 1.304 billion were delivered in Q1 2023
According to Property Finder’s findings for Q1 2023.

Investments Inflow in Property Development.

There are major investments that are taking place in the market, which reflect how the property sector is still developing. This is according to Property Finder’s data; find below the detailed insights.

The residential and mixed-use real estate sector recorded 522 ongoing projects worth USD 309.9 billion.

The ongoing real estate projects in Egypt across 21 governorates; not just that, they have reached advanced stages of development, with roughly 52% halfway through.

There are key investment destinations in the country like Cairo and Gize. Each has attracted residential real estate investments with varying percentages.
- Cairo: 59%
- Giza: 15%

Q1 2023 saw eight developers starting construction on 9 projects in 4 different cities with an estimated total cost of USD 1 billion; it’s expected to increase to 15 projects in the next quarter.

The majority (44%) of the new projects are located in Cairo, while Giza is home to 33%, mainly in New Zayed City.

During Q1 2023, Egypt witnessed the delivery of 17 projects with a combined value of USD 1,304 million. This represents a 31% increase in terms of volume and a 32% hike in value compared to Q1 2022.
Around 24% of these projects are located in Cairo, with New Cairo being the focal point of development; this is because it has 50% of the city’s delivered projects and contributes an impressive 92% to their total value.

Giza Governorate is home to 18% of the delivered projects with a total value of USD 108.5 million.

Egypt Residential Real Estate Market Analysis

The Egypt Residential Real Estate Market size is expected to grow from USD 18.04 billion in 2023 to USD 30.34 billion by 2028, at a CAGR of 10.96% during the forecast period (2023-2028).

There is an increasing demand for residential units in key cities of Egypt, especially Cairo. Government initiatives and upcoming projects are also key drivers of the market.

Despite the difficult economic backdrop brought on by the global pandemic, all major Egyptian real estate sectors could grow or remain stable in 2021. Cairo’s residential real estate market has seen the most growth in the last year, with rents in some areas increasing by up to 8% Y-o-Y.
In 2021, approximately 19,000 residential units were completed in Cairo, bringing the governorate’s total residential stock to approximately 227,000. This is a 40% increase over the previous year, when only 2,500 residential units were delivered. Most of the residential supply completed in 2021 will be large mixed-use developments, with some developers opting for smaller-scale projects to manage cash flows. A government directive was issued in 2021 prohibiting developers from offering any units for sale until at least 30% of the project was completed.
The Administrative Capital for Urban Development’s action is also likely to have increased the project completion rate by encouraging developers to shorten the time to delivery. Looking ahead, an estimated 29,000 units were estimated to be completed in 2022, with a large proportion of them located east of Cairo. With the Greater Cairo population expected to double over the next two decades, developers will be in high demand for residential properties. The New Administrative Capital (NAC) is one area that has significantly increased its residential property offering in the last year.
Several landmark developments, including New Garden City and Capital Residence, have been completed or are nearing completion, expanding the options for residents looking to relocate to the new city. The New Administrative Capital, which houses Egypt’s key ministries, government buildings, and foreign embassies, is set to become the country’s main administrative and financial center in the coming years. With over 50,000 workers expected to relocate to the NAC soon, the city will see an influx of new residents, and developers should benefit from a concentrated demand for housing.

Egypt Residential Real Estate Market Trends

This section covers the major market trends shaping the Egypt Residential Real Estate Market according to our research experts:

Increasing Private Investment in Real Estate Sector Driving the Market

The Egyptian real estate sector is one of the country’s hottest investment areas. Property growth rates surpassed 15% in 2021, according to the Ministry of Planning and International Cooperation. The sector has benefited from the uncertainty and instability of regional and global economic challenges. Property investments in Egypt increased by 20% in Q2 2021, depending on location, while land prices increased by 30%. However, these broad trends need to provide a complete picture of demand. They only provide a partial picture because they only represent the formal market, which serves a small portion of society.

On the other hand, there is evidence of a trend in this market segment toward flipping properties. This suggests that the standard metrics for assessing demand based on income and savings may need to be revised in specific market areas. Finally, despite the increased tendency toward speculation at the higher end of the market, Egypt has a sizable core of domestic end-users, ensuring a strong demand that ultimately benefits developers in the long run. These trends indicate increased opportunities for home purchases in Egypt.

While demand appears to be present, unit prices are beginning to exacerbate the affordability issue. Housing will continue to be in high demand as the country’s population grows by 2.5 million per year and one million marriages occur. The development of several megaprojects, including expanding special economic zones, stimulates economic growth. Other measures to encourage economic growth include the Suez Canal, New Alamein City, and the New Administrative Capital. For example, the current authorization to use the land for public-private partnerships, combined with fundamentally solid local demand, will boost the housing market.

Egypt Residential Real Estate Market trend - investment growth

Egypt’s Real Estate Sector Witnesses Steady Momentum

Highlights

Investments Inflow in Property Development.

Egypt Residential Real Estate Market Size

Egypt Residential Real Estate Market Analysis

Egypt Residential Real Estate Market Trends

Increasing Private Investment in Real Estate Sector Driving the Market

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