From an investment strategic perspective Egypt is located at the heart of MENA, highly weighted gateway to the Mediterranean region and to the African continent making it an unavoidable investment hub in the region. Egypt have witnessed during the years of 2019/2020 only in the real estate sector investments that surplus $70billion dollars towards expanding, upgrading and building new commercial, industrial and housing projects. However, housing projects and residential landscape development will largely remain the domain real estate market of the state. A strong demand with a supply gap of 3 million residential units in 2020, and a growing population of over 100 million people mostly young people are generally derived to buy real estate as a preferred investment and hedging against inflation.
Despite the fact that businesses been operating in shorter hours, Egypt has managed to keep the economy wheels running during the pandemic by not going in a full lockdown. On the back of positive market conditions, the real estate sector in Egypt is solid, steady and the strongest compared to the other state’s or neighbor regions’ markets.
The current ongoing development and construction of 20 new cities, in addition to other 23 existing new cities that are recently under development provide potential investors with attractive, large-scale real estate project opportunities, few names to mention the New Alamein City, New Mansoura City, El Galala City, Red Sea’s Ain Sokhna and of course the New Administrative Capital. The Commercial and retail assets demand has been predominantly increasing, though there is an increasing interest in industrial facilities due to the recent catalyst system regulatory efficiency and improvements, higher government investment spending, rising natural gas production and investment into hydrocarbons and public infrastructure will remain a key driver of headline growth and will continue to create opportunities for firms in construction and heavy industries as well as supporting industries such as transport, banking and financial services.
THE REWARD SEEMS TO BE IN ACTION!
There is no doubt that Egypt provides different variety of strategical investment gateway to the growing economies of the MENA and African regions. Investing in Egyptian properties has seen steady growth when looking at all the economic indicators, as for property prices, a gradual rise of around 20% is witnessed along with efforts exerted by the government and increasing demand towards the real estate sector. It seems that the North African country is succeeding in rewarding investors with a great deal on their ROI due in large part to projects throughout all the country’s governorates in addition to the new administrative capital development and various economic diversification projects spanning industrial, tourism, retail and commercial infrastructure. Real GDP growth is projected to maintain momentum driven by high domestic demand and export growth but a slight downturn in GDB is expected to soften in the first half of the fiscal year of 2021, before growth returns in the second half. Strong economic indicators such as the Purchasing Managers’ Index (PMI) issued by IHS Market demonstrates how Egypt continues to hold a strong position and is a promising market. Furthermore, a noticeable climb in Egyptian expats’ remittances by 7.5%, net international reserves witnessing an increase of around $1.8Million, added to which non-oil trade deficit shrinkage by $566.8Million and the petroleum trade balance seeing a surplus of $312Million reinforces the positive economic outlook of the country.
Foreign direct investment continues to drive market investment as Egyptian institutions started to adopt strategies to alleviate economic risks, both global and domestic. Today’s Egypt's relaxed restrictions on foreign ownership make it realistic for expatriates and investors living abroad to invest in Egyptian real estate. Public and private sectors are in serious actions for urban development sprinting with rapid steps to bounce back even stronger. Unwind foreign policy and a weaker Egyptian pound are seeing foreign firms gradually integrate into the market. A significant amount of investment has been seen coming from Saudi Arabia, summing up to around $54billion in 2019 from private companies and the Saudi Public Investment Fund. Nevertheless, China Fortune Land Development, which has taken actions to invest $20billion, UAE-based Emaar, Nestlé plans to invest USD52.6mn in expansion in Egypt by 2021 These are some of major real estate international players that have taken bold steps in joining Egypt’s market. Egypt is the most populous country in the Middle East and North Africa (MENA) region and, consequently, offers a level of housing demand that is sustainable over the medium-to long term.
REAL ESTATE MARKET AND DIGITILIZATION
Beyond that, Coronavirus has been proven digitalization is the new normal. That is why Egypt earlier digitized 40% of property registration offices nationwide. In parallel, the Social Housing and Mortgage Finance Fund (SHMFF) has signed a cooperation protocol with the Ministry of Communications and Information Technology to automate its various services. Last May, the SHMFF had launched its official Facebook page, in line with the fund’s strategy to communicate with citizens via social media platforms.
Sources: UN statistics, national accounts, housing and economy ministries, trade bodies and associations, international and national news agencies and international real estate companies.