The current year has seen a remarkable surge in real estate prices in Egypt, especially in new cities.
According to real estate developers, consultants, and marketers, prices have risen by more than 100%. They cite various factors for this increase, such as the depreciation of the local currency and the high inflation that has driven up the costs of building materials. They also point out the strong demand for real estate as a way to protect against further devaluation of the Egyptian pound or to benefit from the high returns that real estate offers.
The rise in property prices has been particularly sharp since the outbreak of the Russian-Ukrainian war, which has boosted the demand for real estate for both housing and investment purposes.
The increase has affected not only the purchase prices but also the rental prices of real estate. A JLL report on the Cairo real estate market in the third quarter of 2023 shows that rental prices have increased by 22% in West Cairo and 18% in New Cairo on an annual basis.
Tarek Shoukry, Undersecretary of the Housing Committee in the House of Representatives and Head of the Real Estate Development Chamber of the Federation of Egyptian Industries, said in early November that real estate prices in Egypt had spiked by nearly 100% in the current year. He predicted that prices would rise by another 30% by the end of 2023, reaching a total increase of 130%.
North Coast leads the market
The North Coast has been the most sought-after location in the current year, as it is one of the most attractive coastal tourist destinations with promising investment opportunities. Co-founder, President, and CEO of Tatweer Misr Ahmed Shalaby said that the state’s efforts to create a strong infrastructure had contributed to the appeal of the North Coast.
Shalaby said that real estate prices in the North Coast had increased by more than 100%, attributing this to the high demand from Egyptian customers both inside and outside Egypt for the products of companies operating in the North Coast. He added that the North Coast was still a new market that required a lot of real estate of various types, especially branded units.
He also said that the prices of real estate units in Egypt in general had increased as a result of the currency devaluation and the inflation rates, which had led to significant increases in the costs of building materials.
West Cairo is cheaper than East Cairo
Alaa Al-Sheikh, Chairman of Asset Tap Real Estate Marketing, said that prices had increased by 85% in West Cairo compared to last year, and he expected them to increase by another 40% in 2024 due to the rising costs of construction materials and the currency depreciation.
Al-Sheikh said that administrative and commercial areas in West Cairo had recorded higher increases than residential ones, reaching 120%. He explained that this was due to the higher demand for commercial and administrative units than residential ones, as well as the higher costs of finishing materials such as elevators and electromechanical work in those units.
New Capital’s prices rise monthly
The New Administrative Capital has seen a 37.72% increase in real estate prices for residential apartments this year, while villa prices have gone up by about 5.45% since last month, said Ahmed Abdel Fattah, the business development director of Aqarmap search engine.
Abdel Fattah explained that the ongoing monthly rise in unit prices was expected due to the high demand for real estate in the New Capital, along with the urban development, infrastructure, road networks, and fourth-generation services that the state has invested in, as well as other economic factors.
Unit prices in East Cairo more than double
East Cairo came second to the North Coast region in terms of price increases, with most types of real estate in New Cairo and the Fifth Settlement registering a rate of over 100%, according to Alaa Fekry, a board member of the Real Estate Investment Division of the Chambers of Commerce and the chairperson of Beta Egypt.
Fekry attributed the increase in real estate prices this year to two reasons. The first was the steady rise in building materials prices compared to last year, and the second was the trend of many customers buying real estate for investment purposes and earning returns from their residential projects, either by reselling them or renting them out. He also mentioned the normal demand for housing due to the population growth, which exceeds 2.2 million new births annually.
He noted that companies that had ready-to-move real estate had raised their prices significantly in the past few months of this year while offering fewer units, adding that the next increase in real estate prices should be gradual to maintain customer satisfaction amid the decline in purchasing power.
