CAIRO: Egypt’s real estate market is looking at a slump in 2011, despite a high demand among the middle class.
As a result of the recent 18-day popular uprising that overthrew former president Hosni Mubarak, the market for the upcoming months will face a standstill.
“There is no doubt that domestic demand is present, but nobody will buy property now,” said Hisham Halaldeen, senior investment analyst at Naeem Holding.
According to Halaldeen, the Class A segment of real estate, which is any property priced above LE 500,000, is expected to suffer significantly.
“Class B and C will be strong over the next couple of years,” he said. “There is a high demand for housing in Egypt’s middle class, half a million of that demand belongs to the society’s marriage market.”
Halaldeen believes that the social impact of the recent uprising will delay marriages due to financial constraints; similarly, investors will also not want to commit to an unstable market.
However, the revolution, which called for members of the previous regime to be investigated due to alleged corruption charges, is expected to have a positive long-term effect when it comes to foreign or domestic investments.
“Transparency will allow more investors in Egypt,” Ayman Sami, head advisor at Jones Lang LaSalle real estate firm told Daily News Egypt. “The market will improve, but not before parliamentary elections, that’s for sure,” Sami said.
Egypt’s first parliamentary elections after the fall of Mubarak are set to take place in September 2011.
According to the firm’s April report on real estate in Cairo, the Egyptian revolution will be “trading short term pain for long term gain.”
“The most significant area of uncertainty lies in the validity of legal title offered by major developers, which are viewed as benefiting from the previous administration,” the report said.
Foreseeing a more promising long-term outlook, Sami confirmed that there are foreign and local investors currently “waiting on the sidelines” waiting to enter the market.
“The future of the country’s property market looks brighter, we’re expecting the longer term to be more attractive,” Sami added.
