The reasons for the increase in real estate prices in Egypt

Walid Nagy, Vice President of the Egyptian Arab Land Bank, said that real estate prices in Egypt rose by rates ranging between 15-20% during the last 3 months (May, June, July) of this year.

Naji confirmed that there was an increase in the activity of the real estate sector in the last week of this month, which came with the support of a strong rush to buy a number of housing and other real estate.

Banks within the Egyptian banking sector continue to exchange the interest rate difference provided to support the real estate sector from the Ministry of Housing, Utilities and Urban Communities, after transferring their financing from the responsibility of the Central Bank of Egypt in late November to the relevant ministry.

Mortgage Finance

Data issued by the Mortgage Finance Fund this month revealed that the value of financing provided by banks and companies within the two financing initiatives rose to 60.1 billion pounds by the end of last June.

Banks acquire 96.1% of the total financing provided under the framework of the two real estate sector initiatives, while the share of financing companies accounts for the rest of the percentage.

Financing initiatives

On top of the banks financing initiatives to support the real estate sector are the National Bank of Egypt, Banque Misr, the Arab Land Bank, the Egyptian Bank for Resource Development, the Housing and Development Bank, and the list of funded banks includes 22 banks in addition to 8 companies specialized in real estate financing.

Reasons for high real estate prices

For his part, Ahmed Fares, a real estate expert, said that the real estate sector in Egypt has witnessed, during the recent period, continuous increases in prices, as a result of a group of factors, foremost of which is the high levels of inflation globally and locally, which was certainly reflected in the high levels of prices of building materials, which is one of the most important inputs. The real estate industry in Egypt, reflected in the rise in real estate prices.

He added that the high annual inflation rate caused the prices of building materials to rise, as the price of iron increased to nearly 40,000 pounds per ton, after it was around 10,000 pounds before the recent inflationary wave.

Cost price increase

The appreciation of the dollar has a direct impact on the real estate sector in Egypt, especially the construction cost of projects. The high prices of raw materials and building materials used in projects force developers to raise the unit price. The crisis of rising building materials prices is the biggest challenge facing the real estate sector. On this basis, many emphasize the importance of state support for the industrial sector to provide components for the implementation of various projects.