Egyptian real estate companies are betting on expatriates for sales growth

The Egyptian real estate market relies heavily on expatriate funds to compensate for the decline in buying and selling deals locally, due to high prices and high costs for lending operations, amid expectations that the sector will continue to be popular despite the surrounding circumstances that suggest an increase in unit prices.

According to the global Mordor Intelligence report, the size of the residential real estate market in Egypt is expected to grow from $18.04 billion in 2023 to $30.34 billion by 2028, at a compound annual growth rate of 10.96% during the expected period (2023-2028).

Real estate sector in Egypt

Member of the Construction Committee of the Egyptian Businessmen Association, Chairman of Adva Real Estate Company, Dr. Ahmed El-Shenawy, said that the increasing rises in the prices of construction inputs in Egypt are logical as a result of the rise in the price of the dollar in the parallel market, which governs transactions due to the lack of green currency in banks.

El-Shenawy added that the real estate sector in Egypt is witnessing a recovery during the second half of this year, and he expects that the sector will remain in a boom during the coming year, despite expectations of an increase in real estate prices.

Safe haven for investment

El-Shenawy explained that the real estate sector has proven aptly at the present time that it is a safe haven for investment, noting that the rise in the price of iron during the recent period will affect prices accordingly.

Best selling units

He pointed out that the private sector wants to return to economic housing and provide units with small spaces for young people, pointing out that the housing unit, whose price reaches 4 and 5 million pounds, is the one that currently addresses and targets the middle class.

The head of Adfa Real Estate Company pointed out that the price of residential units up to 20 million pounds is considered a middle class in Egypt currently, as this class has become divided into multiple segments in light of the current economic conditions.

Dr. Ahmed El-Shenawy continued that luxury housing units in Egypt start from 35 million pounds to more, stressing that companies are betting on Egyptians abroad to revive sales, and are targeting all categories under these circumstances.

Egyptians abroad

A member of the Construction Committee of the Egyptian Businessmen Association said that the exchange rate of the dollar in the local market is in favor of workers abroad, and therefore they have the opportunity to buy the real estate unit, so companies focus about 50 to 60% of their marketing policy on Egyptians abroad.

According to the global “Mordor Intelligence” report, there is an increasing demand for residential units in the main cities in Egypt, especially Cairo, and government initiatives and future projects are major drivers of the market.

Despite the difficult economic backdrop, all major Egyptian real estate sectors can grow, and the residential real estate market in Cairo witnessed the largest growth in 2022, with rents in some areas rising by up to 8% on an annual basis.

Egyptian real estate market

He stated that the Egyptian real estate market witnessed remarkable growth among the various economic sectors, and the market in Egypt was divided into two sectors: the construction sector, which specializes in constructing various buildings and properties, and the real estate activities sector, which includes real estate ownership and business services, and according to data from the Ministry of Planning and Economic Development, he contributed The building and construction sector in the annual growth rate of the total value added at the cost of production factors at constant prices, at a rate of 6.99% during the year 2021/2022, and the percentage in the real estate activities sector reached about 3.24% during the same year.

According to Fitch Solutions, real estate investment funds provide the ability to invest in real estate in various ways, which helps reduce market risks, which in turn supports the Egyptian real estate market. The agency expects that government efforts to increase foreign investment and enhance private sector activity in the economy will lead to positive results. For the commercial real estate market.