House prices down 2.28% y-o-y in 2019

Egypt’s housing market shows some signs of improvement, with the nationwide real estate index falling by just 2.28% during 2019, following y-o-y declines of 19.24% in 2018, and 11.49% in 2017. Nominal house prices increased 4.66% y-o-y in 2019.

However, real house prices dropped 10.12% q-o-q during the latest quarter.

Property market outlook remains positive. 

Egypt’s housing market is widely expected to improve further in the coming years – and high-end construction is booming to meet demand. Why? Consider the situation from the perspective of the wealthy Egyptian. If he lives abroad, Egyptian property has suddenly become much less expensive, because of the currency depreciation. In January 2020, the average exchange rate stood at EGP 15.8 per USD 1 – about 44% decline from its value of EGP 8.88 per USD 1 before the decision to float the currency. For those who live in Egypt, the decline in prices makes houses more affordable, making it the right time to purchase. 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.

Rents, rental yields: excellent yields in Cairo at 9.40% 

Cairo apartments are inexpensive at around $831 per sq. m. 

Egypt: typical city centre apartment buying price, monthly rent (120 sq. m)
	Buying price	Rate per month	Yield
Cairo	$124,650	$977	9.04%

Recent news. After expanding by an average of 4.6% annually in the past four years, Egypt’s economy grew by 5.6% in 2019, as various economic reforms are now starting to boost business investment and private consumption. The government’s IMF-spurred policy reforms have contributed to an upgrade of its sovereign credit rating by Fitch Ratings in March 2019 and followed by Moody’s in April 2019.

The Egyptian economy is expected to grow further by 5.8% in 2020 and by another 6% in 2021, according to the African Development Bank.