The Future Trends and Projections of Egypt’s Real Estate Market in 2024 and Beyond

Egypt's real estate market is one of the country's most dynamic and promising sectors, offering lucrative opportunities for investors, developers, and homebuyers. Despite the challenges posed by the COVID-19 pandemic, the market has shown remarkable resilience and recovery, thanks to the government's initiatives, the growing demand for housing, and the diversification of product offerings.

In this blog post, we will explore the current state of the market, the key drivers of growth, and the future trends and projections that will shape the real estate landscape in Egypt in 2024 and beyond.

Current State of the Market

According to Statista, the value of the real estate market in Egypt is projected to reach US$1.45 trillion in 2024, with a compound annual growth rate (CAGR) of 8.91% from 2024 to 2028. The residential real estate segment dominates the market, accounting for about 74% of the total value 2024.

Several factors, such as population growth, urbanization, the rising middle class, increasing disposable income, the preference for modern and integrated communities, and the housing deficit drive the demand for residential units in Egypt. According to Mordor Intelligence, the Egypt residential real estate market size is estimated at US$20.02 billion in 2024 and is expected to reach US$33.67 billion by 2029, growing at a CAGR of 10.96% during the forecast period.

The supply of residential units in Egypt has also increased significantly in recent years, especially in the new cities and developments built across the country. In 2021, approximately 19,000 residential units were completed in Cairo, bringing the governorate's total residential stock to approximately 227,0002. This is a 40% increase over the previous year, when only 2,500 residential units were delivered.

The new cities and developments offer a variety of residential products, ranging from affordable housing to luxury villas, catering to different market segments. Some of the most notable projects include the New Administrative Capital, the New Alamein City, the New Cairo City, the New Mansoura City, the New Galala City, and the North Coast.

Key Drivers of Growth

The real estate market in Egypt is supported by several factors that contribute to its growth and development. Some of the key drivers are:

Government initiatives and incentives: The Egyptian government has implemented various policies and programs to stimulate the real estate sector and address the population's housing needs. Some of these initiatives include the provision of subsidies, loans, and tax exemptions for affordable housing projects, the establishment of the Mortgage Finance Fund, the launch of the National Strategic Plan for Urban Development 2052, the creation of the New Urban Communities Authority, and the development of the mega projects such as the New Administrative Capital and the Suez Canal Economic Zone.

Infrastructure development and improvement: The Egyptian government has also been investing heavily in the infrastructure development and improvement of the country, which enhances the connectivity, accessibility, and livability of real estate projects. Some of the major infrastructure projects include the expansion of the Cairo Metro, the construction of the Rod El Farag Axis Bridge, the development of the electric train network, the upgrade of the road network, and the establishment of new airports and ports.

Foreign investment and tourism: The Egyptian real estate market attracts a lot of foreign investment and tourism, which boosts the demand for residential and commercial properties. According to the World Bank, the foreign direct investment (FDI) inflows to Egypt reached US$8.5 billion in 2020, up from US$6.4 billion in 2019. The tourism sector, one of the country's primary sources of foreign currency and employment, also recovered in 2021 after being severely affected by the pandemic in 2020. According to the Ministry of Tourism and Antiquities, the number of tourists visiting Egypt increased by 70% in the first half of 2021 compared to the same period in 2020.

Innovation and sustainability: The Egyptian real estate market is also characterized by the innovation and sustainability of projects and products, which reflect customers' changing preferences and expectations. The developers are adopting new technologies, designs, and concepts to create intelligent, green, and integrated communities that offer a high quality of life and a low environmental impact. Some examples of innovative and sustainable projects include the ZED Park, the Capital Park, the Cairo Festival City, the Madinaty City, and the Mountain View iCity.

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Future Trends and Projections

The real estate market in Egypt is expected to continue its growth and development in the coming years, driven by ongoing and upcoming projects, favorable demographics and economics, and the increasing demand for housing and commercial spaces. Some of the future trends and projections that will shape the market are:

The New Administrative Capital: The New Administrative Capital (NAC) is one of Egypt's most ambitious and strategic projects, aiming to create a new modern city serving as the country's main administrative and financial center. The NAC covers an area of 700 square kilometers and will house the key ministries, government buildings, foreign embassies, and residential, commercial, educational, cultural, and recreational facilities. The NAC is expected to accommodate 6.5 million people and create 2 million jobs by 2050. The NAC will also likely have a positive spillover effect on the surrounding areas, such as New Cairo City, New Heliopolis City, and Shorouk City, which will benefit from the increased demand for housing and services.

The North Coast: The North Coast is one of Egypt's most attractive and popular destinations for real estate investment and tourism, especially during the summer. The North Coast, which stretches from Alexandria to Marsa Matrouh, offers a variety of residential and commercial products, ranging from beachfront resorts and villas to hotels and malls. The North Coast also witnessed much development and expansion, with new projects and facilities launched yearly. Some notable projects include the New Alamein City, the Fouka Bay, the Marassi, the Bo Islands, and the Telal. The North Coast is expected to see a higher demand and occupancy rate as more people seek to escape the congestion and pollution of the urban areas and enjoy the natural beauty and tranquility of the coastal region.

The Affordable Housing Segment: The affordable housing segment is one of the most critical and underserved segments of the real estate market in Egypt, as there is a massive gap between the supply and demand of affordable housing units. According to the Ministry of Housing, Utilities, and Urban Communities, the housing deficit in Egypt is estimated at 3 million units and is expected to reach 5 million units by 2025. The affordable housing segment caters to the low- and middle-income groups, who comprise most of the population and are potential homebuyers. The government and the private sector are working together to address the housing needs of this segment by providing subsidies, loans, and tax exemptions, as well as developing new projects and schemes, such as the Dar Misr, the Sakan Misr, the Beit Al Watan, and the PPP (Public-Private Partnership) projects. The affordable housing segment is expected to witness higher growth and demand as more people aspire to own homes and improve their living standards.

Conclusion

Egypt's real estate market is one of the country's most promising and lucrative sectors, offering a wide range of opportunities and benefits for investors, developers, and homebuyers. The market has shown remarkable resilience and recovery in the face of the COVID-19 pandemic. It is expected to continue its growth and development in the future, driven by government initiatives, infrastructure improvement, foreign investment and tourism, and innovation and sustainability of the projects and products. The market is also expected to witness significant trends and changes in the coming years, such as the emergence of the New Administrative Capital, the expansion of the North Coast, and the growth of the affordable housing segment. These trends and projections will shape the real estate landscape in Egypt in 2024 and beyond and create new challenges and opportunities for the market players and stakeholders.

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