Analyzing Egypt's Real Estate Market: Why Hasn't the Property Bubble Burst Yet?
- Mohamed Hassan
- Jun 30
- 3 min read
Introduction:
It's really complex to understand the property market in Egypt because it's very unique. Even though many experts thought the market would crash in the last couple of years, it hasn't happened. This blog post looks at why the property prices in Egypt haven't suddenly dropped, even though buying and renting has become very expensive.
Key Points to Understand the Egypt Real Estate Market:
Experts' Predictions: Most property experts, both in Egypt and other countries, think that prices will go up by 10% to 30% in 2025. Almost no one believes prices will fall.
People Are Still Buying: Even though everyone complains about high prices, big property companies are still selling a lot, especially expensive homes.
Misunderstanding About Reselling: When people say it's hard to resell property, they usually mean properties that are still being built. It's normal for people to sell their finished homes. When it comes to properties being built, people are often trying to get out of their contracts because they had unrealistic expectations.
Few Projects Have Completely Stopped: While some building projects are delayed, not many have totally stopped or have really big problems.
How Interest Rates Affect Prices: Some people think that if interest rates go down, property prices will also go down. But this might not be true because most builders don't borrow a lot of money from banks, especially new builders who use the money they get from buyers to build.
Rent Prices Are High: Rent is very expensive right now. This is partly because more people are coming to live in Egypt and also because some people who wanted to buy are now renting because prices are too high.
More Wealthy People: Because property prices have gone up, some people have become richer. These people can afford to invest in property and other expensive things.
What Builders Are Doing: When builders offer longer payment plans and deals, it doesn't necessarily mean they aren't selling. It's just their way of adjusting to what's happening in the market.
Reasons Why the Property Bubble in Egypt Hasn't Burst:
Culture of Owning: Egyptians really value owning property. They see it as a safe way to keep their money and protect it from inflation.
(Egyptian Expats): Egyptians living in other countries are a big support for the market. When the Egyptian pound becomes weaker, properties in Egypt become cheaper for them.
Foreigners Coming to Egypt: People from other countries are also buying property, especially wealthy individuals who want to live in Egypt.
Buyers from Gulf Countries: More and more people from Gulf countries are buying property, especially on the North Coast, because it has become cheaper for them due to the weak Egyptian pound.
Government Support: The government is being flexible with builders about their land payments, which helps the market stay stable.
Suggestions to Make the Egypt Property Market More Stable:
More Rental Housing: Encourage the government and big builders to build more homes for rent at reasonable prices.
Check Buyers' Ability to Pay: Builders should have a way to check if people who want to buy can actually afford to pay the installments, maybe by working with banks.
Control Speculation: Put rules in place to stop people from quickly reselling properties that are still being built before they have paid a certain amount of money (like they do in Dubai).
Stop Cash Transactions for Property: Ban paying for property with cash to prevent money laundering and make it easier to track sales and taxes.
Activate the Escrow Account System: Make sure the law about escrow accounts is used. This means that the government knows how much money builders are getting and what they are spending it on to complete projects.
Conclusion:
The property market in Egypt seems strong and has been able to handle challenges because of different cultural, economic, and regional reasons. By having good rules and regulations, Egypt can make its property market even more stable and help it grow in a healthy way
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