Egypt's real estate prices accelerating

Egypt´s house prices continue to skyrocket, buoyed by strong property demand, coupled with the government´s tough economic reforms in recent years, particularly the successive currency devaluations and the recent liberalization of foreign land ownership rules in the country.

In the first quarter of 2024, the nationwide real estate price index surged by 39.3% from a year earlier, following a year-on-year price growth of 22.3% in the previous year, based on figures from Egypt´s leading real estate portal, Aqarmap. When adjusted for inflation, real estate prices rose by a more modest 4.5% over the same period, amidst persistently high inflation.

Quarter-on-quarter, real estate prices increased 4.9% in Q1 2024 but actually declined 8.2% in real terms.

Real estate prices rose strongly by 41.9% (6.1% in real terms) during 2023, following annual growth of 25.4% in 2022 and 3.6% in 2021, and a y-o-y decline of 9.6% in 2020.

The surge in prices was supported by JLL. "In line with the primary market trends, property owners in the secondary market persistently escalated their annual selling prices and rental rates, particularly during the fourth quarter of 2023, where the rate of increase surged significantly when compared to previous quarters. On a yearly basis, average sale prices in Q4 2023 increased by 56% and 63% in the 6th of October and New Cairo, respectively."

"In anticipation of potential currency devaluations in the country and subsequent cost inflation, contractors further hiked their construction costs. Consequently, developers were compelled to meticulously prepare and adjust their off-plan sale prices to recoup losses and uphold healthy profit margins moving forward. As a result, sale prices in Cairo are expected to continue their upward trajectory in the short to medium term," JLL added.

Egypt´s house price annual change

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 Egyptians. If he lives abroad, Egyptian property is much less expensive, because of the currency depreciation. In fact, in 2022, Egypt devalued again its domestic currency twice, with a pledge to adopt a flexible exchange-rate policy, eventually helping the country clinch a US$3 billion loan from the International Monetary Fund (IMF).

Egypt Monthly Average Exchange Rate graph

In January 2023, the central bank devalued the domestic currency for the third time, resulting in a loss of approximately 40% of its value. Then in early March 2024, the country devalued its domestic currency again by more than 38% to pave the way for billions more in loans from the IMF. As a result, the average exchange rate reached EGP47.79 per USD 1 in April 2024 - a more than 81.4% cumulative decline from its value of EGP 8.88 per USD 1 before the decision to float the currency in 2016.

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.

There is also increasing foreign demand in the country. 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 meters (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.

In addition, the government implemented other reforms recently:

  • 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.
  • 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.

"The implementation of structural reforms, supported by the IMF program, and the shift to a durably flexible exchange rate regime are expected to relieve the pressure on external financing and accelerate reforms," said the European Bank for Reconstruction and Development (EBRD).

Egypt has successfully weathered the adverse impact of the Covid-19 pandemic, with its real GDP rising by 3.5% in 2020 and by another 3.3% in 2021. Egypt is the only nation in the MENA that avoided negative GDP growth during the onset of the pandemic. The economy expanded by a healthy 5%, on average, in the past seven years, as various economic reforms have successfully buoyed business investment and private consumption in the country.

After growing by 6.7% in 2022, the Egyptian economy expanded by another 3.8% last year. The International Monetary Fund (IMF) projects Egypt´s economy to grow by a modest 3% this year.

Egypt´s housing cycle

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 by 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% (-3.5% in real terms) in 2013 and by another 11.4% (2.6% in real terms) in 2014, according to the Aqarmap Real Estate Index.

In 2015, the housing market weakened again, with house prices falling by 4.7% (-14.2% in real terms), 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 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 households´ purchasing power in recent years, causing a temporary fall in real estate demand.

These have been compounded by the Covid-19 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. House prices rose by a modest 3.6% (-2.2% in real terms) in 2021 before accelerating in 2022 by 25.4% (3.4% in real terms).

In 2023, house prices surged by 41.9% (6.1% in real terms) from a year earlier.

Egypt Aqarmap Real Estate Index graph

Local house price variations

Places near the center of Cairo notably still command higher per sq. m. prices than locations further out. A prime example is El Zamalek. Despite being very dense and noisy, Zamalek is still popular because of its very central location, and apartments there command prices that are double that of Dokki.

By contrast, even a luxurious gated community, such as Sheikh Zayed City, commands lower per sq. m. prices. This largely reflects people´s dislike of commuting.

In New Cairo, where the affluent district of Fifth Settlement is located, the average price of apartments soared by 37.1% y-o-y to EGP19,050 (US$398) per sq. m. in March 2024 while villa prices increased 6.1% to EGP 22,450 (US$469) per sq. m., based on figures from Aqarmap.

On the 6th of October, in one of the largest industrial zones in Egypt, apartment prices rose strongly by 63.3% y-o-y to an average of EGP12,900 (US$269) per sq. m. in March 2024 while villa prices were up 24.2% to EGP 21,300 (US$444) per sq. m.

In Nasr City, Cairo´s biggest neighborhood, the average apartment price surged by 40.4% to EGP 11,650 (US$243) per sq. m. in March 2024 from a year earlier, while the average villa price fell by 5.4% to EGP 14,000 (US$292) per sq. m.

In El Maadi, a posh suburban district south of Cairo, the average apartment price increased nearly 50% y-o-y to EGP 14,000 (US$ 292) per sq. m., and villa prices rose by a modest 5.3% y-o-y to EGP 19,950 (US$ 416) per sq. m.

In El Sheikh Zayed City, an upscale integrated city known for its quietness, green areas, and moderate temperatures, apartment prices soared by 46.2% to EGP 19,150 (US$ 399) per sq. m., and villa prices increased by 10.7% to EGP 21,200 (US$442) per sq. m.

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 EGP24,350 (US$508) per sq. m. in March 2024, up by 8.7% from a year earlier, according to Aqarmap.

AVERAGE RESIDENTIAL PROPERTY PRICES IN GREATER CAIRO (IN SQ. M), MARCH 2024
  Apartments Villas
  EGP USD EGP USD
New Cairo 19,050 397 22,450 468
6th of October 12,900 269 21,300 444
El Sheikh Zayed 19,150 399 21,200 442
Heliopolis - Masr El Gedida 11,450 239 19,050 397
Nasr City 11,650 243 14,000 292
El Maadi 14,000 292 19,950 416
El Oubour 10,650 222 19,550 408
Faisal 6,000 125 4,800 100
El Zamalek 24,350 508 - -
El Mohandeseen 16,750 349 17,550 366
Dokki 18,150 379 21,500 448
El Haram 6,450 135 16,850 351
Giza 6,150 128 9,650 201
Mokattam 11,300 236 14,950 312
Helwan 5,300 111 14,500 302
Ain Shams 5,250 110 19,550 408
Badr 5,300 111 11,200 234
Garden City 18,650 389 - -
Downtown - West El Bald 10,700 223 - -
Hadayek El Koba 8,300 173 - -
Hadayek El Ahram 10,350 216 12,050 251
Shoubra 9,700 202 - -
El Agouza 11,500 240 - -
El Manial 17,300 361 - -
El Abbasiya 9,550 199 - -
15th of May 6,650 139 19,700 411
El Sayyeda Zeinab 7,500 156 - -
El Khalifah 4,500 94 - -
El Omraneya 5,000 104 - -
New Heliopolis 8,700 181 16,400 342
New Administrative Capital 22,350 466 22,500 469
El Shorouk City 13,350 278 20,700 432
Sources: Aqarmap, Global Property Guide

There are also numerous investment locations outside Greater Cairo:

On the North Coast, which covers entirely the northern territory of Egypt along the Mediterranean Sea, apartment prices currently range from EGP 17,600 (US$367) to EGP 26,000 (US$542) per sq. m. while villa prices are around EGP12,200 (US$254) to EGP17,150 (US$358) per sq. m.

Alexandria, one of Egypt´s largest cities, a principal seaport, and a major industrial hub, offers a wide range of residential properties. Currently, prices can go as low as EGP 2,800 (US$58) per sq. m. to as high as EGP 22,450 (US$468), depending on location. Alexandria is best known for the Lighthouse of Alexandria (Pharos), one of the Seven Wonders of the Ancient World.

In Ain El Sokhna, a seaside city lying on the western shore of the Red Sea´s Gulf of Suez, residential property prices currently range from EGP 16,050 (US$335) to EGP 21,450 (US$447) per sq. m.

Residential construction activity continues to increase

About 23,000 residential units were completed in Cairo in 2023, up from 18,000 units in the prior year, according to JLL´s Cairo Real Estate Market Overview 2023 report, amidst continued strong demand despite high residential prices.

This brought the total stock in Cairo to about 268,000 units by end-2023.

"Despite the headwinds faced by the residential sector throughout 2023, the market exhibited remarkable resilience and strength. This can be primarily attributed to the substantial demand observed for residential units, despite the significant increase in sale prices due to high inflation and construction costs. Consequently, developers have been able to achieve a more balanced cash flow position" stated the JLL report.

Residential construction is expected to strengthen again this year. For the full year of 2024, around 33,000 units are scheduled for completion in the capital city, according to JLL.

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 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.

Egypt Cairo Residential Supply graph

Affordability remains a big issue for the poor

With a population of about 105.7 million in 2023, 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 US$40 billion project was a collaboration with Arabtec Holding, a UAE company. Called "For the Youth", the project planned to house low-income people in 13 cities across the country. However, after the project broke down, Egypt pursued its own housing program with local banks and the World Bank, providing homes to 241,517 families. The government also launched the Long Live Egypt Fund, a charitable fund to serve the poor and young Egyptians in housing and health. However, they are still inadequate to solve the country´s housing shortage and affordability problem.

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, in-kind privileges (14.1%), and public housing (5.5%).

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, on average, by about 15% to 20% annually over the past decade, while average incomes only increased by 1% per year over the same period.

CBE raised key interest rates further to tame inflation

In March 2024, the Central Bank of Egypt (CBE) decided to raise the overnight deposit rate, overnight lending rate, and the rate of main operations by 600 basis points to 27.25%, 28.25%, and 27.75%, respectively. The discount rate was also raised by 600 basis points to 27.75%.

"The domestic economy has been recently weighed down by foreign exchange shortages resulting in the existence of a parallel exchange rate market and constraining economic growth. Coinciding with this, external spillovers emanating from global inflationary pressures have continued to accumulate as the world economy witnesses successive shocks. Such shocks elevated risk-off sentiment and inflation expectations, amplifying underlying inflation," said the central bank in its Special MPC Press Release in March 2024.

"The resulting exchange rate movements and significant passthrough of international commodity prices, coupled with domestic supply shocks, have resulted in persistent inflationary pressures driving headline inflation to record levels," the central bank added.

In March 2024, headline inflation remained stubbornly high at 33.34%, from 32.67% in the previous year and 10.49% two years ago, based on figures from CAPMAS. This was far above the central bank´s target range of 5% to 9%,

Egypt Interest Rates graph

Government´s finance program boosts mortgage market growth

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 the 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 from only 2 in 2005 to 27 recently. 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 (US$417.1 million) to banks in the form of deposits, 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$10.4 million) to mortgage companies for the first tranche of the program. Moreover, 14 banks provided EGP 5 billion (US$104.3 million) to finance 62,000 housing units as part of the program, according to Mai Abdel Hamid, the head of the Mortgage Finance Fund.

In March 2020, the World Bank approved a loan for Egypt´s Mortgage Finance Fund worth US$ 500 million to finance the country´s social housing programs.

To help struggling borrowers during the onset of the Covid-19 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.

Then in 2021, President Abdel Fattah al-Sisi directed the CBE to launch a new mortgage funding program for low- and middle-income individuals with long-term loans of up to 30 years and with low and simplified interest rates not exceeding 3%.

As of Q1 2024, the total funds disbursed reached about EGP 68.85 billion (US$1.44 billion), benefiting 564,023 individuals. Of which, the contribution of the 22 banks that participated in the government´s mortgage finance program for low-income housing amounted to EGP 66.45 billion (US$1.39 billion) for 544,626 customers - a contribution of about 96.5% of the entire initiative, according to the Social Housing and Mortgage Finance Fund.

The banks with the biggest contribution by Q1 2024 included:

  • National Bank of Egypt (NBE): EGP 17.81 billion (US$371.5 million) equivalent to 25.9% share, benefitting 147,332 individuals
  • Banque Misr: EGP 16.58 billion (US$345.7 million) equivalent to 24.1% share, benefitting 132,046 customers
  • Housing and Development Bank (HDB): EGP 7.3 billion (US$152.3 million) or 10.6% share, benefitting 73,718 customers
  • Banque du Caire: EGP5.6 billion (US$116.3 million) representing about 8.1% share, benefitting 47,840 individuals
  • QNB Alahli: EGP3.8 billion (US$79 million) for 24,864 customers, accounting for about 5.5% share

The rental market remains resilient, with surging rents

Rents for high-end residential properties in Cairo, which are sometimes paid in US dollars, continue to rise rapidly, supported by strong demand.

In the 6th of October district, apartment rentals soared by 25% y-o-y in 2023, following growth of 9% in 2022, 2% in 2021, and 8% in 2020, according to JLL. In New Cairo, rentals for apartments also skyrocketed by 30% in 2023 from a year earlier, after modest increases of 3% in 2022, 1% in 2021, and 5% three years ago.

"Rental rates increased by 25% on the 6th of October and by 30% in New Cairo. Notably, the average growth rate in apartment rents and sale prices slightly outpaced that of villas in both areas as they continued to capture higher demand," said JLL.

"Certain landlords have opted to revise their payment plans back to just 5-8 years from almost reaching 15 years previously. This strategic adjustment is expected to bolster their recovery in the coming period, particularly as they explore cost-saving measures such as buying construction materials in bulk and offering advanced payments to contractors," the JLL report noted.

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 asking the bawab or doorman for vacancies.

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. Traffic costs amounted to about 4% of Egypt´s entire GDP, according to World Bank estimates.

To address these problems, the Egyptian government has been building a new administrative and financial capital since 2015. Originally dubbed "Cairo Capital" and "global city for Egypt´s future", the New Administrative Capital will address crowding, pollution, and rising house prices in Cairo. The proposed city will be developed in phases over 40 years, according to then-housing minister, Mostafa Madbouly. 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.

The new 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 healthcare facilities, 1.8 million sq. m. of residential space, and 1,250 mosques and churches. The plan also includes a new presidential palace, a new parliament building, new buildings for various government administrations, and an area dedicated to foreign embassies.

The new capital city is envisioned as a "Smart City" that will "take advantage of the sustainable technologies of today as well as be adaptable to future technologies," according to Cairo Capital´s website.

Currently, however, residential property prices in the New Administrative Capital have risen to levels that are out of reach to mid-level employees with an annual average income of just US$4,800. As such, most employees opted to commute from Cairo using the Light Rail Transit system or other nearby cities.

The Sisi regime and army rule

Previous President Mohammed Morsi succeeded Hosni Mubarak in June 2012 but was ousted by a military coup on 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.

Among 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 Macaroni Queen, an army company; mineral water is sold by Safi, an army-controlled company; all the major toll 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.

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.

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 the largest in the Middle East, is owned by El-Areesh Cement Co for Cement, which is controlled by the armed forces. 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, low-income housing projects, and urbanistic projects.

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, into 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 sings 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 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.

Then during the 2020 parliamentary elections, Egypt´s Mostaqbal Watn Party, which is a strong supporter of Sisi, secured nearly 55% of the contested seats. The Parliament was already controlled by Sisi supporters, but Mostaqbal Watn sharply increased its share of seats from 57 to 315 in the 596-seat chamber.

However, the Covid-19 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 remain far below Sisi´s targeted spending of 3% of GDP. In fact, in 2019, the 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$ 5.4 billion) in its 2020/2021 budget. Then in the 2021/2022 budget, the government allocated about EGP 109 billion (US$2.3 billion) to the health sector.

An ambitious new health insurance system is on the way, which promises to revolutionize public health care and make it accessible to the poor. Its implementation was initially expected to take up to 15 years, but Sisi has reduced this period to 10 years.

In December 2023, Sisi won a third six-year term, beating three low-profile candidates. Egypt´s struggling economy and the war in Gaza were key electoral issues.

Egypt´s economy to grow modestly this year

Egypt has successfully weathered the adverse impact of the Covid-19 pandemic, with its real GDP rising by 3.5% in 2020 and by another 3.3% in 2021. In fact, Egypt is the only nation in the MENA that avoided negative GDP growth during the onset of the pandemic. The economy expanded by a healthy 5%, on average, in the past seven years, as various economic reforms have successfully buoyed business investment and private consumption in the country.

Egypt GDP Growth and Unemployment graph

After growing by 6.7% in 2022, the Egyptian economy expanded by another 3.8% last year. The International Monetary Fund (IMF) projects Egypt´s economy to grow by a modest 3% this year.

Egypt´s budget deficit stood at about 7.1% of GDP in 2023, from 6.1% in 2022, 7.2% in 2021, and 7% in 2020, according to the Ministry of Finance.

For the upcoming fiscal year 2024-25, total public expenditures are projected to reach EGP 3.9 trillion (US$81.3 billion) while expected revenues will be EGP 2.6 trillion (US$54.2 billion), resulting in a total deficit of EGP 1.3 trillion (US$27.1 billion), according to Egypt´s Finance Minister Mohamed Maait.

The labor market seems to be improving. In Q4 2023, nationwide unemployment declined to 6.9%, from 7.1% in the previous quarter and 7.2% in the same period last year. Egypt´s unemployment rate averaged 10.2% from 2000 to 2023, according to the IMF.

Inflation remains extraordinarily high. In March 2024, headline inflation was 33.34%, slightly up from 32.67% in the previous year and 10.49% two years ago, based on figures from CAPMAS. This was far above the central bank´s target range of 5% to 9%, mainly due to a weaker Egyptian pound after a series of devaluations in recent years. Likewise, the core inflation remained elevated at 33.66% in March 2024.

Egypt Inflation graph

Investment hotspots

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.

1. Cairo

Emaar´s Uptown Cairo

Constructed by the developer Emaar Misr, the EGP 12 billion (US$250.55 million) Uptown Cairo 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 March 2024, apartment prices rose modestly by 4.3% y-o-y to an average price of EGP26,600 (US$555) per sq. m., based on figures from Aqarmap. In contrast, villa prices plunged by 62.5% y-o-y to EGP10,100 (US$211) per sq. m.

2. Red Sea

Katameya Heights

The super-luxurious Katameya Heights launched before Uptown Cairo, covers an area of about 1.5 million sq. m. Katameya Heights, introduced in 1997, was 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 a marvelous clubhouse, a beautifully designed golf course, and luxurious villas.

Rehab City

Rehab City, a real estate development located in New Cairo, is being developed by Talaat Moustafa 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 March 2024, the average apartment price stood at EGP 19,050 (US$398) per sq. m. while villa prices averaged EGP 22,450 (US$469) per sq. m., based on figures from Aqarmap.

Madinaty

With a total budget of EGP 60 billion (US$1.25 billion), Madinaty is considered one of the biggest and most expensive real estate developments in New Cairo. Developed by Talaat Moustafa 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 March 2024, the average apartment price was EGP 26,500 (US$553) per sq. m. while the average villa price was EGP 18,600 (US$389) per sq. m., according to Aqarmap.

New Cairo City

Emaar Misr is also building a 5,000-home 3.8 m sq. m. project, in 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 an EGP 6 billion (US$125.1 million) residential development located in the fifth district of New Cairo City. The 3.8 million sq. m. development features 5,000 apartments, townhouses, and villas.

Sharm el Sheikh

Sharm el Sheikh is now the country´s most luxurious and attractive resort, newer and more upscale than Hurghada, and 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 that 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; and the Carlton Resort, Hadava. Fully residential is Montazah in Ras Nasranr.

Hurghada

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$60.5 million).

Sahl Hasheesh

Eighteen kilometers South of Hurghada lies Sahl Hasheesh Bay, where a purpose-built resort flanking 12.5 kilometers of sandy beach was built. Covering 32 million square metres, by the time it was completed in 2014. Sahl Hasheesh has 20 5-star hotels and 8 golf courses. The Egyptian Resorts Company (ERC) owns exclusive development rights.

Port Ghalib

Much further south near Marsah Alam, two and a half hours from Luxor, the Port Ghalib project is being developed by the Al Kharafi Group of Kuwait along 18 kilometers of shoreline. It opened in November 2007. Marsa Alam has a newly built international airport, an international convention center, 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

Marassi

The Marassi resort, worth around EGP9.92 billion (US$206.9 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 EGP7 million (US$146,000) to EGP35 million (US$730,000), based on Property Finder listings.

Almaza Bay

Travco, the main German tour, launched Almaza Bayat Marsa Matruh 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 features 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.

Apartment prices in Almaza Bay start from EGP2.9 million (US$60,500) and can reach up to EGP4.3 million (US$89,700). On the other hand, townhouses and villas are sold from EGP 7 million (US$146,000) to EGP 10 million (US$208,600). Units that are located directly at the beach are priced as high as EGP 40 million (US$834,300).

The three major developments in Almaza Bay include the Jaz Almaza Beach Resort, Jaz Crystal Resort, and Jaz Oriental Resort.

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