CAIRO- Egypt is witnessing for the first time the possibility of purchasing housing units with an installment system that extends up to 13 years. This development reflects a great frustration among real estate developers, who face increasing challenges in achieving sales due to high prices to levels described as exaggeration and unprecedented in the real estate market.
In the midst of complex economic challenges and a sharp decrease in the value of the Egyptian pound, questions arise about the new trends in the real estate market.
Does this endeavor represent an attempt to alleviate real estate prices on consumers who are burdened by the increasing burdens of inflation, or does it reflect a sense of growing frustration among real estate developers regarding their ability to market units at high prices?
Save the market or evidence of a crisis?
Observers who spoke to Al Jazeera Net believe that in light of the continuous hedging of price fluctuations, it seems that the option of stretching is only a strategy to match the difficult economic conditions, as developers seek to find alternative solutions to attract buyers at a time when the economy is witnessing a remarkable decrease in purchasing power.
The real estate market in Egypt – the largest Arab country in terms of population – which is one of the largest productive sectors in Egypt and contributes about 18% of the GDP supported by the population growth of about two million people annually, is a severe momentum during the past two years as a result of the economic crisis that the country has gone through. And the crisis was the following:
- Foreign currency scarcity.
- The value of the pound decreased from 18.5 to 50 pounds per dollar.
- Raising interest rates to a record level of 27%.
- Inflation rates exceeded 40%.
Real estate sales in Egypt achieved record growth of 65% in 2024, to reach 2.5 trillion pounds (about 49 billion dollars) compared to 1.5 trillion (about 29.4 billion dollars) in 2023, according to Tariq Shukri, head of the Real Estate Development Chamber of the Federation of Industries.
The extended installments .. why now?
“The expansion of real estate companies to extend the payment of payment and reduce the provider to 5% of the total price of the unit is an attempt to attract buyers for reasons related to high prices and weak mechanisms Real estate financing.
He explained in his speech, to Al -Jazeera Net, that extending the deadlines for the installments reached 15 years, and this increases the price of the housing units, which start from about 5.5 million pounds (about 107 thousand dollars) for the apartment from one room (about 60 meters) to 13 million pounds (256 thousand Dollars) for the unit of 3 rooms (above 150 meters) half -finishing, and customers carry high benefits with a high price of 25% on average.
During the meeting of Egyptian Prime Minister Mustafa Madbouly with a number of businessmen and investors, at the end of last year, they number the most prominent challenges facing the private sector, including high interest rates and a decrease in the value of the pound, which negatively affects the cost of financing for companies.
With the start of the inflation wave from its historical summits to 24% in January 2025, most expectations indicate that the Egyptian pound, which is currently about 50 pounds to the dollar, continued to decline this year and the stay rates remain high so far.
The size of the Egyptian real estate market is about 50 billion dollars, according to the reports of some research companies, amid expectations that 8.3% will grow at an annual rate, and that it is about 76 billion dollars during the expected period 2024-2029.
Correction
A member of the Board of Directors of the “Egyptian Federation for Construction and Building Contractors” Mohamed Abdel Raouf “expected a wave of correction in the luxury real estate market as a result of its saturation of prices and buyers together, especially with the decline in demand for real estate as a safe haven.
He pointed out, in a statement to Al -Jazeera Net, that the sector has been witnessing a remarkable stagnation since the beginning of the year, which prompted the major companies to enter into severe competition by providing long -term payment deadlines for the price of housing units.
And he went on to say that the housing units did not increase the price in a real way, but what happened is that the value of the pound decreased sharply, and considered that what is published about the numbers about the real estate market is inaccurate and there is no real database.
The Egyptian real estate pole, Hisham Talaat Mustafa, acknowledged the slowdown in real estate sales in the recent period as a result of raising interest rates, indicating in televised statements that the increasing demand indicates that the market needs to provide one million housing units annually.
Gap
In view of the increase in demand for housing units and the presence of a gap between supply and demand, as Egypt needs about 450 thousand units, according to the Minister of Housing, he stressed that the government is working to provide many housing forms and patterns and aims to establish 200 thousand units by 150 thousand units for low -income and 50 thousand for middle -income people.
Within the framework of the state’s plan to provide housing at reasonable prices, the minister revealed the offer of many presidential initiatives, including “housing for all Egyptians”, which witnessed a great demand and work on the continuous offering of units within the initiative to meet the increasing demand for the units.
Mohamed Sami, a accountant and married for 3 years in Sharkia Governorate, expresses his frustration with his failure to obtain any housing unit for several years, saying: “The number of units offered by the Ministry of Housing represents a small percentage of the number of applicants and often attempts to failure.” .
In his speech to Al -Jazeera Net, he complained about the high rates of rents and the private sector’s interest in luxury housing units in new and coastal cities, and the government cannot alone provide all the needs of the market that some estimate in one million units.
The areas of residential apartments for low -income people range from 75 and 90 meters, at prices starting from 184 thousand pounds and reaching 700 thousand pounds. As for the units for middle-income, their areas range between 100 and 150 meters, at prices ranging between 1.5 million and 2.5 million pounds (about 29-49 thousand dollars).
