Egypt’s tough economic reforms beginning to pay off
Lalaine C. Delmendo | July 06, 2021
Egypt’s housing market made a surprise comeback, buoyed by the government’s tough economic reforms in recent years, particularly the recent liberalization of foreign land ownership rules in the country.
During the year to Q1 2021, the nationwide real estate price index surged 28.3% (22.6% inflation-adjusted), in sharp contrast to the y-o-y fall of 30.8% in the same period last year, according to Egypt’s leading real estate portal Aqarmap.
Quarter-on-quarter, the index increased 1.1% during the latest quarter (0.7% inflation-adjusted).
President Abdel Fattah el-Sisi recently removed the last restrictions on foreign ownership of land and property in Egypt, in an effort to buoy the housing market. He also allowed the government, the biggest landowner in Egypt, to use its land for public-private partnership schemes. These improvements, together with the fundamentally strong local demand, are now beginning to boost the housing market, and the overall economy in general.
In November 2016 Egypt floated the Egyptian pound (EGP), causing a dramatic depreciation against major currencies – making real estate more attractive from the perspective of the wealthy Egyptian. If he lives abroad, Egyptian property is much less expensive, because of the currency depreciation. In May 2021, the average exchange rate stood at EGP 15.67 per USD 1 – about 43% decline from its value of EGP 8.88 per USD 1 before the decision to float the currency.
There is a huge, real demand for housing in Egypt, as the country’s population increases by 2.5 million annually and there are about one million marriages taking place every year.
In addition, the government implemented other reforms recently, in line with the three-year IMF reform programme:
- A value-added tax (VAT) was introduced.
- Egypt’s Investment Law was amended to attract more foreign investors.
- Fuel and electricity subsidies have been continuously reduced since 2014, as part of the government’s goal of reducing spending. In Q1 FY 2020-21, spending for fuel subsidies has been reduced by 46% y-o-y to EGP 3.9 billion (US$249 million).
- The price of sugar was raised by 40%.
- The CBE has abolished a ‘priority list’ for imports.
- The time and day limits during which banks are allowed to execute foreign currency exchanges have been extended.
Other initiatives included the launch of several mega-projects to boost economic growth, including the expansion of the Suez Canal and the construction of a new capital city.
“We remain optimistic in our outlook for Cairo’s residential market in the medium-to-long term, as the government strongly supports the sector,” said Jones Lang Lasalle. “Various initiatives introduced in 2020, such as reducing the interest rate and setting the lending rate at 10.25%, are likely to stimulate investments. Also, more recently, property restrictions on foreign ownership of land and property were removed.”
“These efforts are complemented by private developer initiatives such as introducing long-term payment plans, decreasing down payments, and launching cash-back offers,” Jones Lang Lasalle added.
During 2020, Egypt weathered the impact of the COVID-19 pandemic, with its real GDP rising by 3.6%. In fact, Egypt was the only nation in MENA that avoided a negative GDP growth last year. The economy has expanded by a healthy 4.8%, on average, during the past five years.
The Egyptian economy is projected to expand by 2.5% this year and by another 5.7% in 2022, according to the International Monetary Fund (IMF).
Foreigners can buy property in Egypt, under Law No 230 of 1996. However, foreigners cannot buy more than two pieces of real-estate, which cannot exceed 4,000 square metres (sq. m.), and their purpose must be for a family member to live in the property. If registered, the property cannot be sold or rented for five years.
Erratic house price movements
Egypt has seen erratic house price movements in the past few years, buffeted by economic and political events.
Property prices in Egypt rose by 13.7% (4.5% in real terms) in 2005 but fell 0.4% (-4.4% in real terms) in 2006 and by another 0.6% (-10.4% in real terms) in 2007, according to the 2008 Egypt Housing Survey conducted by Bearing Point Inc, which had a cross-Egypt sample. House prices fell further in 2008, due to the global crisis. In fact by end-2009, house prices in the secondary market had fallen by about 37%, in real terms, according to local real estate analysts.
Egypt’s housing market strongly recovered in early-2010, mainly due to robust economic growth, rising by about 10% in 2010. For a long time the housing market was then stable in real terms, with the nationwide real estate price index rising by 9% (-2.4% in real terms) in 2013 and by another 11.4% (1.1% in real terms) in 2014, according to the Aqarmap Real Estate Index.
In 2015, house prices fell again, amidst political uncertainty and civil unrest. But the property market bounced back immediately, with house prices rising by 24.7% (1.2% in real terms) in 2016.
In 2017, house prices rose by 7.9% in nominal terms, but actually fell 11.5% when adjusted for inflation. The wide difference between the nominal and real figures was mainly due to extraordinarily high inflation during the period, after the government floated the Egyptian pound (EGP) in November 2016, causing a dramatic depreciation against major currencies. Other economic reforms, such as the reduction of fuel subsidies, have also broadly impacted household purchasing power in recent years, causing a temporary fall in real estate demand.
These has compounded by the coronavirus pandemic, with house prices falling by almost 10% during 2020 (-14.4% in real terms). With things slowly going back to normal, the Egyptian housing market is now showing huge improvements.
Local house price variations
Places near the centre of Cairo notably still command higher per sq. m. prices than locations further out. A prime example is Zamalek. Despite being very dense and noisy Zamalek is still popular because of its very central location, and apartments there command an average of US$1,400 per sq. m., as opposed to Dokki’s US$780 per sq. m.
By contrast, even a luxurious gated community, such as Sheikh Zayed City, commands lower per sq. m. prices (US$684). This largely reflects people’s dislike of commuting.
At the Fifth Settlement, one of New Cairo’s most affluent districts, the average price of apartments rose by 6% y-o-y to EGP 10,100 (US$643) per sq. m. in May 2021 while villa prices remained steady at EGP 19,100 (US$1,215) per sq. m., according to Aqarmap.
In the 6th of October, one of the largest industrial zones in Egypt, apartment prices soared by 21% y-o-y to an average of EGP 7,550 (US$480) per sq. m. in May 2021, and villa prices fell slightly by less than 1% to EGP 17,750 (US$1,130) per sq. m.
In Nasr City, one of Cairo’s biggest and ugliest neighborhoods, the average apartment price rose by 3.5% to EGP 7,450 (US$474) per sq. m. in May 2021 from a year earlier while the average villa price dropped 1% to EGP 16,250 (US$1,034) per sq. m.
In El Maadi, a posh suburban district south of Cairo, the average apartment price increased slightly by 0.6% y-o-y to EGP 8,150 (US$ 519) per sq. m. while villa prices plunged by almost 21% to EGP 17,150 (US$ 1,091) per sq. m.
In El Sheikh Zayed City, an upscale integrated city known for its quietness, green areas, and moderate temperatures, apartment prices rose by 2.2% to EGP 10,750 (US$ 684) per sq. m. and villa prices increased 7.5% to EGP 19,650 (US$1,250) per sq. m.
AVERAGE RESIDENTIAL PROPERTY PRICES (IN SQ. M.), MAY 2021
|New Cairo – Fifth Settlement||10,100||643||19,100||1,215|
|6th of October||7,550||480||17,750||1,130|
|El Sheikh Zayed City||10,750||684||19,650||1,250|
|Heliopolis – Masr El Gedida||9,800||624||15,250||970|
|El Hadabah El Wosta||5,950||379||10,650||678|
|South El Jizah District||5,350||340||17,300||1,101|
|El Koba Gardens||6,750||430||-||-|
|Hadayek El Ahram||4,150||264||5,100||325|
|15th of May||4,300||274||7,500||477|
|El Sayyeda Zeinab||5,500||350||-||-|
|New Administrative Capital||11,800||751||20,400||1,298|
|Sources: Aqarmap, Global Property Guide|
In El Zamalek, an affluent district of western Cairo surrounding the northern portion of Gezira Island in the Nile River, the average apartment price stood at EGP22,000 (US$1,400) per sq. m. in May 2021, according to Aqarmap.
El Gouna, a premier resort town located in the Red Sea, has one of the most expensive housing in Egypt, with apartment prices ranging from EGP18,000 (US$1,145) to EGP20,000 (US$1,273) per square metre (sq. m.). Villa prices range from EGP26,000 (US$1,655) to EGP38,000 (US$2,418) per sq. m.
On the North Coast apartment prices range from EGP9,000 (US$573) to EGP22,000 (US$1,400) per sq. m. while villa prices start at EGP10,000 (US$636) per sq. m.
About 25,000 residential units are scheduled for delivery in 2021, according to JLL. Most are located in New Cairo and 6th of October.
Several major construction projects, mostly fully-integrated communities, have been launched in recent years, including the Palm Hills Development, the Mostakbal City, the iCity October, and the iCity New Cairo, among others.
However, investments in the lower segments of the market remain weak. The country’s major developers tend to cater exclusively to the upper middle and upper classes due to the absence of an efficient mortgage law.
Approximately 50% of the population is classified as lower income and around 37% of urban space in Egypt consists of informal settlements, while “unsafe slums” are roughly 1% of urban areas, according to Sherif El-Gohary, of the Ministry of Urban Renewal and Informal Settlements.
Key interest rates unchanged
In April 2021, the Central Bank of Egypt (CBE) kept its benchmark interest rate – the overnight deposit rate – unchanged at 8.25% for a fourth consecutive time, as headline inflation has stabilized at 4.5% and economic condition is continuously improving. Likewise, the overnight lending rate and the discount rate were also kept at 9.25% and 8.75%, respectively.
The CBE lowered its benchmark rate by 50 basis points in both September and November and by 300 basis points at the outbreak of the pandemic in March 2020. The key rates are now at their lowest levels in almost seven years.
Mortgage market is expected to grow rapidly
The Egyptian mortgage market dates back to 2001, when Presidential Decree No. 277 created the Mortgage Finance Authority (MFA). But currently Egypt’s mortgage market is equivalent to less than 1% of the country’s GDP, according to Mona El-Baradei of Egyptian Banking Institute.
However, the mortgage market is now expected to grow rapidly due to government initiatives. The number of mortgage finance companies (MPC) operating in Egypt increased to 27 in 2020, from only 2 in 2005. These include Sakan, Al-Qula, EHFC, Egyptian Housing Finance Co., EMRC, Amlak, Al-Tayasor, Tamweel, Tamweel Emirates, Naeem, Al-Ahly, Arab African International, Al-Ahly United, and El Masreyin, according to the Egyptian Financial Supervisory Authority (EFSA).
To address the housing shortage, the Central Bank of Egypt (CBE) launched a mortgage finance program in 2014 to finance low income housing projects - allocating EGP 20 billion (USD 1.28 billion) to banks in the forms of deposit, to benefit low income citizens.
In February 2016, the program was expanded to increase the number of beneficiaries and to add a new segment of low-income citizens at a lower interest rate of 5%. In addition, above middle-income citizens were also included at an interest rate of 10.5%.
Earlier in 2016, the CBE allocated EGP500 million (US$31.95 million) to mortgage companies for the first tranche of the program. Moreover, 14 banks provided EGP 5 billion (US$319.5 million) to finance 62,000 housing units as part of the program, according to Mai Abdel Hamid, the head of Mortgage Finance Fund.
In March 2020, the World Bank approved a new loan for Egypt’s Mortgage Finance Fund worth US$ 5oo million to finance the country’s social housing programs.
To help struggling borrowers during the pandemic, the government temporarily reduced interest rates from its mortgage finance program and ordered MPCs to provide a six-month grace period to any client on request.
Rental market remains resilient
Rents for high-end residential properties in Cairo, which are sometimes paid in US dollars, continue to rise, amidst slight gains in the value of the domestic currency in recent months.
In the 6th of October district, apartment rentals rose by 2% y-o-y in Q1 2021, following an 8% increase during 2020, according to Jones Lang Lasalle. In New Cairo, rentals for apartments rose slightly by 1% in Q1 2021 from a year earlier, after rising by 5% last year.
“The rental market has managed to perform better, with some projects exceeding the market performance. This is mainly due to the increase in demand for newer gated communities which are now becoming more mature and livable,” said Jones Lang Lasalle.
Expats looking for apartments prefer direct methods rather than using realtors. One of the most popular methods is going to the American University in Cairo to look for apartment ads. Another one is going directly to the residential building of choice, and ask the bawab or doorman for vacancies.
Affordability a big issue for the poor
With a population of more than 100 million, Egypt needs around 175,000 to 200,000 additional housing units each year, and has a housing shortage of about 3 million. While there are approximately 5.6 million vacant units nationwide, most of these are beyond the means of the low and middle income classes.
In response, President El-Sisi spearheaded the construction of one million housing units for low income youth. The USD 40 billion project is a collaboration with Arabtec Holding, a UAE company, and is the largest construction contract in the region. About 150,000 units have already been delivered under the program and another 260,000 units are under construction. Called "For the Youth", the project is expected to be finished by 2022, housing low income people in 13 cities across the country.
About 44.4% of Egypt’s housing stock is occupied by owners, while about 35.7% of the housing stock is rented. Other tenure types are gifts, and in-kind privileges (14.1%), and public housing (5.5%).
Residential supply in Cairo stood at 208,000 units in 2020, up 181% from 2012’s 74,000 units, according to JLL. Another 25,000 units are expected to be constructed this year. Low-income housing, usually priced around US$14,000 per unit remains unaffordable and most developers do not supply houses to this income group.
The price of the cheapest social housing units has risen by 14% per year over the past decade, while average incomes only increased by 1% per year over the same period.
The ambitious ‘New Administrative Capital’
The Cairo metropolitan area is now nearing 20 million people, making it one of the most congested cities in the world. In fact, traffic costs amounted to about 4% of Egypt’s entire GDP, according to World Bank estimates.
In 2015, the Egyptian government unveiled plans to build a new administrative and financial capital, dubbed "Cairo Capital" and "global city for Egypt’s future", in an effort to address crowding, pollution, and rising house prices in Cairo. The proposed city will be developed in phases over 40 years, according to MostaphaMadbouly, Egypt’s housing minister. Phase 1 is estimated to cost about US$45 billion.
The new capital, which is located about 40 km east of Cairo, is being built on 69,000 hectares – about two times the size of Cairo.
Cairo Capital could house up to 7 million people, with the initial plans including 21 residential districts housing 1.1 million residential units, 40,000 hotel rooms, 663 health care facilities, 1.8 million sq. m. of residential space and 1,250 mosques and churches.
The new capital city is envisioned as a "Smart City" which will "take advantage of the sustainable technologies of today as well as be adaptable to future technologies," according to Cairo Capital’s website. Cairo Capital will include 91 sq. m. of energy farms employing renewable energy sources.
Prime Minister Mustafa Madbouly has denied that the new capital will only cater to wealthy people. However, the smallest apartment, measuring about 120 sq. m., is expected to cost about US$73,000, which is out of reach to mid-level employees with an annual average income of just US$4,800.
The Suez Canal project
A key project of the Sisi government has been the Suez Canal Development Plan. The New Suez Canal project, largely funded by popular contribution, was completed in July 2015. It adds a new 35-kilometre-long second shipping lane in the existing 164-kilometre-long canal, allowing ships to pass in opposite directions, and deepens and expands a 37-kilometre-long section of the existing canal.
In October 2018, President Sisi inaugurated the building of four sets of tunnels, beneath the new and old Suez Canals. The construction of the tunnels, which will cost about EGP 18 billion (US$1.15 billion), aims to develop major residential and industrial centers in the governorate of Ismailia.
According to Kamel el-Wazir, Chairman of the Armed Forces’ Engineering Authority, the four tunnels will operate as follows:
- The first tunnel, located in southern Port Said, will connect Salloum on the western border with Rafah in the east through the international coastal road in the canal region.
- The second tunnel, located in northern Ismailia, will connect the international western border with northern Cairo through the Regional Ring Road.
- The third set of tunnels, located in Sarabium, will connect the northern part of the Regional Ring Road to Taba
- The fourth tunnel will extend from Ahmed Hamdy tunnel to connect the western international border with the southern part of the international regional road.
“What we are doing is a very strong linking between the East and West of the canal, and between Sinai and Delta,” said President Sisi. “We are talking about developing and reconstructing 60,000 kilometers, this is a huge project that cannot be completed in 10 or 15 years.”
Prior to the pandemic, trade passing through the canal contributed to around 2% of Egypt’s economic output, according to Moody’s. About 12% of global trade, roughly one million barrels of oil, and 8% of liquefied natural gas pass through the canal everyday.
However during 2020, total revenues from the Suez Canal fell by 3.3% y-o-y to US$5.61 billion.
The Sisi regime and army rulePrevious President Mohammed Morsi succeeded Hosni Mubarak in June 2012, but was ousted by a military coup in July 3, 2013. Current president Abdel Fattah al-Sisi, the ex-general who led the coup, has launched a crackdown on Muslim Brotherhood supporters, and cemented army rule.
Amid the thousands of Muslim Brotherhood sympathizers in jail are dozens, if not hundreds, of secular activists jailed for their political activities. Meanwhile a growing number of liberals have left the country to go abroad, since no opposition is allowed, and any opposition, even humorous comment, can result in immediate arrest and long prison terms. Authorities have also ordered travel bans and asset freezes against prominent human rights organizations.
Under the Sisi regime, the commercial reach of the military has greatly expanded. The army is all over the place. More than 50 hotels are run by the army, their profits never declared; new petrol station licenses go exclusively to Wataneya, an army-controlled company, with soldiers manning the petrol pumps; pasta is sold by Macarona Queen, an army company; mineral water is sold by Safi, an army-controlled company; all the major roll roads are run by the military; an army department called the Engineering Department of the Armed Forces buys houses and lands for commercial purposes, again wholly exempt from any audit or taxation.
This is not all. In August 2018, President Sisi inaugurated a 500-hectare cement production complex located in the city of Beni Suef. The US$1.1 billion cement plant, considered as the largest in the Middle East, is owned by El-Areesh Cement Co for Cement, which is controlled by the armed forces. There is also a plan that the area around the pyramids will be controlled by an army department called the Sector of the Civil Service, with tickets sold to the benefit of the military. There is no Parliamentary oversight of any of these activities.
It is a system of daily corruption. Military-controlled projects are mostly built by the Engineering Department of the Armed Forces (building civil and military infrastructure, bridges, schools, tourist projects, the development of all sports activities, plus low-income housing projects, plus urbanistic projects).
These projects are then run by the Department of the National Service Projects (which runs companies dealing with petrochemicals, cement, petroleum, land and agriculture; any project to do with industrialisation and mechanisation and to do with agriculture); mineral water (Safi); pasta (Macarona Queen); plus a maritime shipment company; and, under the Department of Clubs and Hotels for the Military, run by field marshals Nabil Salamah and Ismael el Behery, hotels, clubs and rest houses - examples being Queen Service which controls the Wi Fi restaurants and the hotel chains Tolip and Tiva).
All these companies are run by military men, in military uniform, with conscript soldiers often doing the menial work. Unsurprisingly, some claim that the military’s commercial reach expanded rapidly in recent years, now constituting between 20% and 25% of GDP.
The army is happy to sell land to foreign companies, such as to the French supermarket chain Carrefour. But foreign enterprises become involved at their own risk, always open to the likelihood of being squeezed, in a situation where the army makes the law.
In May 2017, Sisi approved a new law that aims to regulate non-governmental organizations (NGOs) in Egypt. The law makes it impossible for NGOs to function independently, as it strictly controls the funding of NGOs and gives the government the authority to monitor and challenge their day-to-day activities.
Despite these abuses, the sycophantic press daily signs the praises of the regime. Egyptian TV channels, which are very numerous and have enormous audiences in a country of high illiteracy, talk about the wonderful achievements of Sisi, the great genius of Sisi, the admiration of foreign leaders for Sisi, and complain about the viciousness of the Qatari-Iranian-Turkish conspiracies against Egypt.
In March 2018, Sisi won a second four-year term against a sole minor opposition candidate. More serious challengers, including human rights lawyer Khalid Ali and former PM Ahmad Shafiq withdrew from the race, and former armed forces chief of staff Sami Anan was arrested.
Two years later, the pandemic exposed the chronic weaknesses of Egypt’s underfunded public health system – which Sisi pledged to reform at the start of his presidency. Health budgets rose in recent years, but remains far below Sisi’s targeted spending of 3% of GDP. In fact in 2019, healthcare budget was just around 1.3% to 1.8% of GDP.
To fight the pandemic, the government increased its allocated spending for health care by 46% y-o-y to EGP 258 billion (US$ 16.5 billion) in its 2020/2021 budget.
An ambitious new health insurance system is on the way, which promises to revolutionize public health care and make it accessible to the poor. But the new system will take up to 15 years to roll out.
Egypt’s economy remains robust; inflation moderates
During 2020, Egypt has successfully weathered the adverse impact of the COVID-19 pandemic, with its real GDP rising by 3.6%. The economy has expanded over the past 5 years by a healthy 4.8%, on average.
The Egyptian economy is projected to expand by 2.5% this year and by another 5.7% in 2022, according to the International Monetary Fund (IMF).
In May 2021, S&P affirmed Egypt’s sovereign credit rating in both long- and short-terms with a stable outlook, following a similar decision by Fitch Ratings in March.
“Egypt´s ratings and Outlook are supported by its recent track record of fiscal and economic reforms, which the authorities are furthering, as well as its large economy, which has demonstrated stability and resilience through the global health crisis,” said Fitch Ratings. However, the ratings agency noted that the economy is constrained by its large fiscal deficits, high general government debt/GDP and domestic and regional security and political vulnerabilities.
Egypt’s budget deficit increased modestly to about 8.5% of GDP in FY21, from 7% in FY20 and 7.9% in FY19. The pandemic also interrupted the country’s debt reduction initiatives, with the consolidated general government debt-to-GDP ratio estimated to have risen to about 90% in FY21, from 88% in FY20 and 84% in FY19.
In May 2021, headline inflation stood at 4.8%, the highest level since December 2020 but still far below the average inflation rate of 15% from 2014 to 2019. Inflation peaked at almost 33% in July 2017, mainly due to the devaluation of the Egyptian pound. This has aggravated social tensions in recent years, given the country’s persistently high unemployment and poverty incidence. Around half of Egypt’s 100 million people are living near or below the poverty line.
Unemployment was 7.4% in Q1 2021, up from 7.2% in the previous quarter but down from 7.7% a year earlier. Egypt’s unemployment rate averaged 11.3% from 2010 to 2020, according to the IMF.
Buying opportunities in Egypt - and particularly the newly-built opportunities - can be conceptually divided into three areas: Cairo, the Red Sea, and the Mediterranean Coast.
- Emaar’s Uptown Cairo
The EGP 12 billion (US$765 million) Uptown Cairo is currently being constructed by the developer EmaarMisr. The development offers several residential villages, a golf course, malls, sports and leisure facilities, as well as a business park. This is the first wholly foreign-owned developer to enter the Egyptian market.
In May 2021, apartment prices fell slightly by less than 1% to an average of EGP 23,550 (US$1,502) per sq. m. while villa prices increased almost 18% to EGP28,000 (US$1,786), according to Aqarmap.
2. Red Sea
- Katameya Heights
The super-luxurious Katameya Heights launched prior to Uptown Cairo, covers an area of about 1.5 million sq. m. Katameya Heights, introduced in 1997, were purely local. Formerly a stretch of desert, Katameya Heights is now a large suburban area, with large houses, and has attracted enormous interest. The resort offers marvelous clubhouse, beautifully designed golf course and luxurious villas.
- Rehab City
Rehab City, a real estate development located in New Cairo, is being developed by TalaatMoustafa Group (TMG). The development is located on the Cairo-Suez road. It offers many shopping malls and a cinema complex. Rehab City is preferred by many upper middle class locals.
In May 2021, the average apartment price stood at EGP 14,750 (US$939) per sq. m. while villa prices averaged EGP 23,200 (US$1,476) per sq. m., based on figures from Aqarmap.
With a total budget of EGP 60 billion (US$2.91 billion), Madinaty is considered one of the biggest and most expensive real estate developments in New Cairo. Developed by TalaatMoustafa Group(TMG), it includes 80,000 residential villas, townhouses and apartments. There are also recreational and commercial areas, schools, medical facilities and hotels. Madinaty is adjacent to El Shrouq City.
Construction began in July 2006 and stopped for 7 years while the developer was in prison accused of murdering his mistress.
In May 2021, the average apartment price was EGP 12,500 (US$795) per sq. m. while the average villa price was EGP 22,450 (US$1,429) per sq. m., according to Aqarmap.
- New Cairo City
EmaarMisr is also building a 5,000-home 3.8 m sq. m. project, New Cairo City. The development is considered a new extension to Cairo, the capital. New Cairo City, when completed, is expected to feature several villages offering gated villas, townhouses and high-rise apartments.
Mivida is a EGP 6 billion (US$383 billion) residential development located at the fifth district in the New Cairo City. The 3.8 million sq. m. development features 5,000 apartments, townhouses and villas. In May 2021, the average apartment price stood at EGP 22,150 (US$1,415) per sq. m. while villa prices averaged EGP 25,600 (US$1,636) per sq. m., according to Aqarmap.
- Sharm el Sheikh
Sharm el Sheikh is now the country’s most luxurious and attractive resort, newer and more upscale than Hurghadaand is host to 5-star hotels and international conferences. Sharm has a vibrant nightlife, and boasts many nightclubs, the longest continuous bar in the Middle East, and a marina which can handle private yachts and sailboats. Zoning laws limit building heights, which have prevented the surroundings’ natural beauty from being spoiled by high rises.
Sharm’s development has been led by tourism, though hotels such as the Ritz-Carlton have sold private villas. New residential developments tend to follow this hotel-based pattern, such as the Sierra Resort Nabq Bay; the Laguna Vista Residence in Naqb Bay; the Carlton Resort, Hadava. Fully residential is Montazah in RasNasranr.
Hurghada is the most popular seaside resort in Egypt, though it is overcrowded and now slightly seedy. Hurghada has an international airport with direct flights to major European countries, as well as flights to Cairo. The city is divided into three parts: Downtown (the old part); Sekalla (the city center); and El Memsha (the modern part).
- Gamsha Bay
In Gamsha Bay, 60 kilometers north of Hurghada, a 320 million sq. m. tourism and housing project is being developed by Damac, which developed the Dubai Towers, and will be completed over 10 years. The development has a total budget of EGP 2.9 billion (US$185.3 billion).
Eighteen kilometers South of Hurghada lies SahlHasheesh Bay, where a purpose-built resort flanking 12.5 kilometres of sandy beach was built. Covering 32 million square metres, by the time it was completed in 2014. SahlHasheesh has 20 5-star hotels and 8 golf courses. The Egyptian Resorts Company (ERC) owns the exclusive development rights.
- Port Ghalib
Much further south near MarsahAlam, two and a half hours from Luxor, the Port Ghalib project is being developed by Al Kharafi Group of Kuwait along 18 kilometres of shoreline. It opened in November 2007. MarsahAlam has a newly-built international airport, an international convention centre, a man-made lagoon, and a multiplicity of sports facilities. The Port Ghalib marina is now classed as an official new Port of Entry to Egypt.
3. Mediterranean Coast
The Marassi resort, worth around EGP9.92 billion (US$634 million), is being developed by Emaar. It is located on a 7-km coastline at Sidi Abdel Rahman on the Mediterranean near El Alamein. Marassi resort will offer up to 3,000 hotel rooms, luxury villas, chalets, a marina, an 18-hole golf course and healthcare facilities. Currently, a three-bedroom chalet in Marassi costs around EGP5 million (US$319,000) to EGP 6 million (US$383,000) , based on Property Finder listings.
- Almaza Bay
Travco, the main German tour, launched Almaza BayatMarsaMatruh in 2014, located on the Mediterranean between Alexandria and Libya. The Almaza Bay Resort has a total area of 5 million sq. m. and boasts about 2.5 km of flawless beachfront in one of the most pristine beaches in the world. According to Travco’s official website, Almaza Bay will feature almost 2,000 residential units, an active marina, a retail urban center, food & beverage and outdoor dining, a sporting club, and several open space activities.
The three major developments in Almaza Bay include the Jaz Almaza Beach Resort, Jaz Crystal Resort and Jaz Oriental Resort.
- The Cairo Real Estate Market A Year in Review 2020 (JLL MENA): https://www.jll-mena.com/content/dam/jll-com/documents/pdf/research/jll-the-cairo-real-estate-market-a-year-in-review-2020.pdf
- The Cairo Real Estate Market Research | Q1 2021 (JLL MENA): https://www.jll-mena.com/content/dam/jll-com/documents/pdf/research/the-cairo-real-estate-market-q1-2021.pdf
- Greater Cairo Prices Guide (Aqarmap): https://aqarmap.com.eg/en/neighborhood/cairo/
- World Economic Outlook Database, April 2021 (International Monetary Fund): https://www.imf.org/en/Publications/WEO/weo-database/2021/April/select-subjects?c=469,
- Monthly Average Rates (OFX): https://www.ofx.com/en-au/forex-news/historical-exchange-rates/monthly-average-rates/
- Inflation (Central Bank of Egypt): https://www.cbe.org.eg/en/MonetaryPolicy/pages/inflation.aspx
- Discount Rates (Central Bank of Egypt): https://www.cbe.org.eg/en/EconomicResearch/Statistics/Pages/DiscountRates.aspx
- Monthly Average Interest Rates (Central Bank of Egypt): https://www.cbe.org.eg/en/EconomicResearch/Statistics/Pages/MonthlyInterestRates.aspx
- Uptown Cairo Compound - Emaar real estate apartments and villas prices (Aqarmap): https://aqarmap.com.eg/en/neighborhood/cairo/mokattam/compounds/uptown-cairo/
- Egypt’s central bank keeps overnight rates on hold (Reuters): https://www.reuters.com/world/middle-east/egypts-central-bank-keeps-key-interest-rates-hold-statement-2021-04-28/
- Will mortgage financing support new homeowners in Egypt? (Oxford Business Group): https://oxfordbusinessgroup.com/analysis/home-economics-government-has-launched-number-initiatives-offer-mortgage-financing-low-and-middle
- Egypt’s Fuel Subsidies fall by 46% in Q1 FY 2020-2021 (Energy Egypt): https://energyegypt.net/egypts-fuel-subsidies-fall-by-46-in-q1-fy-2020-2021/
- Egypt (Centre for Affordable Housing Finance in Africa): https://housingfinanceafrica.org/countries/egypt/
- Egypt - Inclusive Housing Finance Program-for-Results - Additional Financing (The World Bank): https://www.worldbank.org/en/news/loans-credits/2020/03/20/egypt-inclusive-housing-finance-program-for-results-additional-financing
- So why is Egypt building a new capital city right next to Cairo? (City Monitor): https://citymonitor.ai/skylines/so-why-egypt-building-new-capital-city-right-next-cairo-855/
- Egypt´s Suez Canal revenues dip to $5.61 bln in 2020- canal authority (Reuters): https://www.reuters.com/article/egypt-suez-canal-idUSC6N2FD01F
- Egypt President Abdul Fattah al-Sisi: Ruler with an iron grip (BBC News): https://www.bbc.com/news/world-middle-east-19256730
- Sisi Promised Egypt Better Health Care. Virus Exposed His True Priority. (The New York Times): https://www.nytimes.com/2020/11/11/world/middleeast/egypt-sisi-coronavirus-healthcare.html
- Fitch Affirms Egypt at ´B+´; Outlook Stable (Fitch Ratings): https://www.fitchratings.com/research/sovereigns/fitch-affirms-egypt-at-b-outlook-stable-10-03-2021
- Egypt’s property market surprisingly resilient - October 01, 2015
- Egypt: House price rises continue in Q2 2013, but future is now uncertain - October 20, 2013