 |
 |
 |
|
 |
|
 |
|
 |
|
 |
|
The Egyptian Real Estate Market
On analyzing the reasons behind this thriving state, which has consequently led to the price surge of everything that has to do with real estate; land, building materials, home supplies etc., we find that these rationale may be classified under two main categories: Firstly, national reasons; instigated by the Egyptian economy. Secondly, international reasons; triggered by an assortment of global, political and economic changes. Undergoing deeper analysis of these reasons allows the following elaboration: 1- National Changes: a- The Egyptian stock market situation b- Bank interest rate decline c- Changes in the laws governing foreign investors ownership as well as encouraging their investment projects d- The law of real estate mortgaging and the undertaking of procedures to get it going. 2- International Changes: a- The war in Iraq and Lebanon's incidents b- Gasoline prices increase which led gulf investors to look into alternative markets c- global surge of construction raw materials d- 9/11 attacks which led to a general lack of confidence and security when it comes to dealing with Muslims and Arabs even regarding investment projects. Following the well-known supply and demand rule, we find a constant increase in demand in this period owing to the growing major investors operating in the real-estate domain. There is no doubt that this will influence the upward surge of real estate prices. Add to that the constant increase in prices of raw materials. Envisioning the future of this industry, there is no such thing as prices that keep rising to infinity. This could be compared with bumpy hills where prices increase, stagnate, and could either rise or drop after that. However, prices have to keep climbing as long as there is an escalating demand compared to supply, until a state of fulfillment in demand is established. Therefore, we expect that in the upcoming period we shall witness an increase in real estate prices due to these reasons: More and more Egyptian, Arabic and foreign investors are being attracted to this industry motivated by its mounting profits and minimal risks. Add to that the government's encouragement of this industry reflected in removing obstacles and christening or modifying relevant laws. The continuing increase in building materials prices internationally surely entails national prices escalation. This type of investment's return motivates the increase of internal and external demand on real estate properties in Egypt . Another very important factor is that real estate prices in Egypt are still much lower than those in many other countries. In the upcoming period, we expect an overflow in the supply of luxurious housing as too many real estate companies have been focusing only on this field. We also expect that in the upcoming period, some real estate agencies will be attracted to investing in managerial and commercial real estate. Withdrawing from the competition over luxurious housing, some other agencies will be attracted to invest in average type real estate homes. It is truly disappointing that we are still unable to provide housing for our major social cluster; the limited and average incomes classes.
We hope for a greater diversity in real estate investments coping with the needs of all classes. We aspire that our beloved Egypt forever remains the land of security and safety, and a home that lures investors from all around the globe. By Dr. Maged A. Al-Azeem Board Chairman of E-Dar Board Chairman of First Class for Real Estate Marketing Board Member of the Arabian Real Estate Organization |
Certainly, we have all been in touch with the Egyptian real estate market flourishing within the last couple of years. It is positively booming compared to previous periods during which the market had suffered various states of stagnation and recession.