The Egyptian Real Estate Market Trends in 2017 vs. 2016
The real-estate sector is one of the dominant sectors in the Egyptian market as it plays a major role in the development of Egypt’s economy. Despite the country’s economic and political instability due to currency flotation, the investment and demand for properties have witnessed a major increase in 2017 compared to 2016. This article will shed the light on the mega projects that were developed in Egypt after currency flotation and caused a major shift in the real estate market in the country. In addition, the article will discuss the recent property trends that led to alteration of the percentage of demand for properties in 2017 vs. 2016.
The Administrative Capital is one of the mega projects launched recently by the Egyptian government. It is characterized by its prominent location 45 kilometer east of Cairo and 60 kilometers from Suze and Ain Sokhna. This project represents the future of Egypt as it is the result of cooperation between the Egyptian government and many construction companies in the country. The main aim of this project is to bridge the gap between supply and demand in the real estate market by offering housing units at reasonable prices, along with, providing employment opportunities for young Egyptians.
This comprehensive project is composed of Exhibition City, Convention Center, Medical City, Smart City in addition to governmental and residential areas. Moreover, it includes an administrative center with a parliament building, a presidential palace, an international airport and a diplomatic neighborhood. The project is therefore considered one of the most important residential and investment destinations for those wishing to live in the new administrative capital.
Similarly, The Golden Triangle Economic Zone is one of the important projects that is set to bring a promising future to Upper Egypt especially in Safaga, Qena, Al- Qosei and Qeft as the project will lead to major investment in mining, agriculture, and industrial sectors. Moreover, about 65% of the project is composed of modern industrial hubs, while the rest of the project will include touristic, commercial, and residential units which in fact will upgrade the standards of living in these areas.
On the North Western coast of Egypt near Marsa Matrouh governorate, a new multi-million-dollar project is located, spanning over an area of 48.000 feddans, “New Alamein City” is to be found. This project represents a real turning point for the entire North West Coast region and as it is going to attract residents and investors to this area through the development of the residential, touristic, industrial, and agricultural sectors. Official sources state that 10,000 residential units will be built there over an area of 8,000 feddans during the first phase of the project. Additionally, the project will include all the modern facilities and amenities designed to fulfill different needs desire of the residents. Those amenities include; sports clubs, cinemas, theaters, resorts, and a scientific research center in addition to 16 hotels.
Supply vs. Demand
Generally, the demand for properties for sale/rent in Egypt has increased in the first quarter of 2017 by 179.17% in comparison to 2016. While the supply of properties has increased over the same period of time by 54.26% in comparison to 2016.
Cairo, Giza, Red Sea, Suez, and Alexandria are the most popular provinces among investors and tenants. When it comes to coastal areas, the northern coast comes in the first place compared to other areas in terms of demand for properties available for sale/rent. Also, the area reaches its high record during the summer season due to the intensive advertising campaigns on different platforms such as TV, social media, billboards, etc. As a result, holiday homes have become a very popular lifestyle choice and investment and is expected to grow underpinned by the choices available to the consumer and the volume of products, both in terms of price points and location.
Furthermore, housing units in the new projects in Egypt are under demand by Egyptian expatriates throughout the whole year. That is due to several factors including; exchange rate liberalization, high salaries, and their ability to save money. In addition, real estate developers have increased the opportunities for investment in the residential market via the delivery of smaller units on more flexible pricing strategies. This approach has increased the chances for expats to purchase residential units in sophisticated districts in Egypt at reasonable prices.
Moreover, A number of residential projects have been announced in new districts such as; 6th of October, Mostakbal City, New Cairo with many retail and entertainment.
Apartments vs. VillasIn comparison to 2016, the number of apartments available for sale has increased by 38.30% while the number of ones available for rent has decreased by 19.57%. And the percentage of villas available for rent has also decreased by 52.43 in comparison to 2016.
In 2017 the demand for apartments for rent in Egypt has increased by 78.59% in comparison to 2016, while teh supply has decreased by 19.57%. Regarding villas, the demand for the ones available for rent has increased by 124.78% while the supply has decreased by 52.43%. Furthermore, the demand for apartments available for sale in 2017 has increased by 84.07% while supply has decreased by 38.30%. This clearly indicated that people are more likely to invest in the real estate sector in 2017 compared to 2016.
Not only expats are the ones who benefited from the devaluation but also the hotel and tourism industry as Egypt has become an affordable destination for international tourists. Also, the tourism promotion campaigns initiated in 2016 have helped to promote a positive image of the country.
Overall, the previous report provided by PropertyFinder proved the demand for properties available for sale/rent in 2017 has increased compared to 2016 despite the economic crisis and the rise in prices.