The Egyptian economy has faced significant challenges in recent years, prompting new government policies aimed at stabilizing the market. These adjustments have directly influenced the real estate sector, shaping the landscape for both buyers and renters.
The Market Watch report for H1 2024 offers detailed insights into these impacts, highlighting crucial trends and developments. This report serves as a valuable resource for understanding how economic shifts and policy changes affect real estate investments in Egypt.
Highlights
The Egyptian economy grappled with a variety of challenges recently, such as currency devaluation and high inflation rates. These issues have led to a significant reliance on imports and reduced purchasing activities. For example, the Suez Canal’s revenue was adversely affected by Yemeni Houthi attacks on shipping lanes in the Red Sea and Gulf of Aden.
Despite these hurdles, Egypt’s GDP managed a real growth rate of 3.8% and is predicted to grow at a rate of 2.6%. The first quarter of 2024 saw important deals, including a substantial $35 billion Emirati investment in Ras Al Hekma. Another significant agreement was made with the IMF, increasing the extended fund facility from $3 billion to $8 billion.
The real estate and construction sectors faced declines in real growth rates, at -3.14% and -4.6% respectively, but they are expected to grow at 2.58% and 2.43% in 2024. These trends highlight both the volatility and resilience within various sectors of the Egyptian economy.
Market Prospects
Ongoing Developments (Progress Status)
During the first quarter of 2024, Egypt saw substantial progress in residential real estate across 21 governorates. Specifically, 58% of these projects have surpassed the halfway mark in construction. Around 10.7% are more than 90% complete, and 19.5% range between 75% and 90% completion.
In Cairo, a significant portion of projects have advanced:
- 65.1% are beyond the halfway point.
- 11.9% are nearing final stages.
- 21% range between 75% and 90% completion.
- 32.1% of projects are between 50% and 75% complete.
The private sector has been a crucial player, driving the majority of these developments and capturing 68.9% of all investments in ongoing residential projects.
Newly Initiated Developments
In H1 2024, the launch of new projects in Egypt surged by 50% compared to the same period in 2023. This growth stems from economic stability following the currency float by the central bank.
A total of 12 new projects commenced in H1 2024, with an investment of $1.59 billion spread across five cities. This is a considerable increase from H1 2023, which saw 8 new projects costing $1.123 billion.
The new developments in Cairo accounted for 19.5% of the total investment in fresh projects. Meanwhile, Giza saw the most significant share, 39.3%, with a value of $625 million across five projects.
Completed Developments
In the first quarter of 2024, 8 projects valued at $319 million were completed. This signifies a 50% decline in the number of projects but a 75% decrease in monetary value compared to H1 2023.
These completed projects included:
- Cairo: 2 projects totalling $160 million, representing 50.2% of the total investment for H1 2024.
- Matruh: One significant project, named “Mountain View—Ras El Hekma—Paros Phase,” valued at $100 million.
The private sector led with 6 projects worth $240 million, while the governmental sector completed 2 projects at $79 million.
These statistics reflect a robust real estate sector backed by strategic investments from both local and foreign investors, offering promising opportunities for developers and stakeholders alike.
New Administrative City (NAC)
The New Administrative Capital (NAC) in Egypt is experiencing significant development, with 106 ongoing projects valued at approximately $69,832 million, accounting for 22.6% of all investments in Egypt during H1 2024. Among these projects, 16 are governmental, representing 72.1% of the total investment in the city. Additionally, the private sector is highly active, undertaking 90 projects worth $19,494 million, which makes up 84.9% of all private investments in the NAC.
Real estate developments in the NAC are progressing well. A notable 72.6% of these projects have completed more than half of their construction. Eight projects are nearing completion with over 90% of their work done, and 23.6% are 75%-90% finished. The city welcomed a new project, “Justice City,” in H1 2024, at a cost of $161 million.
Moreover, two projects were delivered during this quarter, totaling $160 million in investments. The government spearheaded one project, valued at $60 million, while the second project, developed by Talaat Moustafa Group Holding (TMG), accounted for $100 million.
Here is a breakdown of ongoing projects:
| Category | Number of Projects | Investment Value (Millions $) |
|---|---|---|
| Governmental | 16 | 50,338 |
| Private Sector | 90 | 19,494 |
| Total | 106 | 69,832 |
The New Administrative City continues to attract significant investment and shows promising prospects for economic growth and development.
High-in-Demand Areas for Rent and Sale
Property Purchase Prices in Egypt
The demand for buying properties in Egypt is increasing, driven by various factors including economic conditions and real estate development projects.
Apartments are particularly popular in areas such as 6th October City, Mostakbal City, New Cairo City, New Capital City, and Sheikh Zayed City. Average listing prices for apartments in H1 2024 are as follows:
| Location | One-bedroom | Two-bedroom | Three-bedroom |
|---|---|---|---|
| 6th October City | EGP 4,650,000 | EGP 5,500,000 | EGP 6,900,000 |
| Mostakbal City – Future City | EGP 3,152,000 | EGP 4,600,000 | EGP 6,100,000 |
| New Cairo City | EGP 5,000,000 | EGP 6,879,750 | EGP 7,000,000 |
| New Capital City | EGP 3,713,000 | EGP 4,198,000 | EGP 4,800,000 |
| Sheikh Zayed City | EGP 5,200,000 | EGP 6,926,000 | EGP 8,164,000 |
In terms of villas, favored locations include 6th October City, Madinaty, Mostakbal City, New Cairo City, and Sheikh Zayed City. Average asking prices for villas are:
| Location | Three-bedroom | Four-bedroom | Five-bedroom |
|---|---|---|---|
| 6th October City | EGP 12,950,000 | EGP 16,000,000 | EGP 17,000,000 |
| Madinaty | EGP 17,700,000 | EGP 28,000,000 | EGP 35,000,000 |
| Mostakbal City – Future City | EGP 9,000,000 | EGP 10,000,000 | EGP 11,437,000 |
| New Cairo City | EGP 14,000,000 | EGP 21,015,000 | EGP 27,000,000 |
| Sheikh Zayed City | EGP 15,000,000 | EGP 16,216,000 | EGP 16,500,000 |
Property Rental Costs in Egypt
Rental properties also show significant demand, and price points vary across prime locations. Apartments for rent in high-demand areas include 6th October City, El Maadi, Madinaty, New Cairo City, and Sheikh Zayed City. Rental prices are as follows:
| Location | One-bedroom | Two-bedroom | Three-bedroom |
|---|---|---|---|
| 6th October City | EGP 20,000 | EGP 25,000 | EGP 29,000 |
| El Maadi | EGP 22,000 | EGP 30,000 | EGP 37,000 |
| Madinaty | EGP 15,000 | EGP 17,000 | EGP 20,000 |
| New Cairo City | EGP 28,000 | EGP 40,000 | EGP 46,000 |
| Sheikh Zayed City | EGP 18,000 | EGP 30,000 | EGP 33,000 |
Villas for rent are popular in 6th October City, Madinaty, Mokattam, New Cairo City, and Sheikh Zayed City. The following table shows average rental prices:
| Location | Three-bedroom | Four-bedroom | Five-bedroom |
|---|---|---|---|
| 6th October City | EGP 50,000 | EGP 60,000 | EGP 75,000 |
| Madinaty | EGP 40,000 | EGP 50,000 | EGP 55,000 |
| Mokattam | EGP 75,000 | EGP 90,000 | EGP 150,000 |
| New Cairo City | EGP 80,000 | EGP 130,000 | EGP 150,000 |
| Sheikh Zayed City | EGP 80,000 | EGP 90,000 | EGP 100,000 |
