Challenges and market trends in Egypt
In a short period of time, new opportunities began to appear throughout the year despite the challenging atmosphere. Reports have emphasized that the most popular and highly demand provinces and areas among investors and tenants are located not only in Cairo, but also in Giza, the Red Sea, Suez and Alexandria.
Other investment trends have grown clearly in the second-home market where the North Coast is greatly favored, compared to other areas when buyers and tenants consider purchasing a vacation home. When it comes to spend holidays outside Cairo North Coast areas have proven to record the highest occupancy level by tenants and buyers, specifically during the summer season.
A demand or a desire to acquire a certain lifestyle has not only grown common among Egyptians abroad and expat investors—who were the first to benefit from the devaluation, which resulted in affordable luxurious housing prices—but it has also benefitted international tourists who can easily afford long holidays at some of the best hotels in the country, thus boosting the tourism industry. Both buying and renting properties have become leading trends of the year, increasing demand in 2017 compared to 2016.
Popular trends in purchase have prevailed in certain areas in the capital deemed as prime locations, including Nasr City, Maadi, Sheikh Zayed, Helioplis, Sixth of October and New Cairo (Fifth Settlement), according to data compiled by Global Property, a website dedicating to providing intelligence for residential property investors.
With affordability being a growing issue for these
socioeconomic classes, President Abdel Fatah al-Sisi in 2014 announced a plan
to build 1 million affordable units for low-income youth across 13 cities in
collaboration with UAE-based company Arabtec.
A part of the project is expected to be finalized by the end
of this year, and the entire project is set to be delivered by 2022. This comes
in parallel to the 62,000 homes being developed for the same segment as part of
the Central Bank of Egypt’s (CBE) initiative to provide affordable housing.
“The flotation will be positive for the real estate sector
and will create an attractive investment climate that brings stability to the
market,” Shalaby , CEO of leading real estate developing company Tatweer Misr says. “While we cannot say
definitively how the outlook will be at the current time until things become
clearer, we do not expect in the short future that demand on housing will vary
as there may be increased demand by those seeking investments to offset demand
by those seeking housing. Real Estate developers will have to also play their
role in finding creative offers and incentives that will attract customers.”
When looking for competitive offerings, buyers should take
ito their account two primary factors; the location and the credibility of the
developer, according to Coldwell’s Banany. Even though considering location is
crucial, the current market inventory is experiencing an undersupply, according
to Banany, as some locations ran out of supply completely especially prime
locations in Ain Sokhna and the North Coast. He advises home buyers to avoid
searching for special locations in Rehab, New Cairo, Sixth of October and
Sheikh Zayed because they were all sold out.
