$12.4 billion deal that boosted Egypt's economy

The improvement in Egypt’s macroeconomy follows the government reforms which were part of a $12.4 billion deal with the International Monetary Fund (IMF) in November 2016. The Egyptian economy has since made some remarkable progress in the last three years with a significant increase in foreign direct investment. In fact, the IMF recently commended the strict programme which has seen Egypt’s economy growth amongst the highest in the Middle East.

Reform plans, which included subsidies cuts and currency flotation, have helped stabilise the economy but have also caused a substantial strain on consumer purchase power. Nonetheless, the real estate market has remained buoyant and successfully managed to adapt to changes in demand and supply.

Egypt is an interesting market for foreigners

According to the Central Bank of Egypt, the GDP growth is expected to reach 5.4% in 2019, and similar growth rates are anticipated until 2021.

On the other hand, during 2019, inflation is expected to drop to lower levels as the impact of subsidies cuts diminishes. If the Central Bank of Egypt decides to lower interest rates in 2019, this could well lead to an increased interest in real estate investment, not only from Egyptians but also from foreigners.

New homes at competitive prices

The majority of demand for residential units was in the form of new off- plan property sales which caused activity in the secondary market to remain at a standstill as sales and asking prices reduced. This change is attributed to new developments offering new homes at competitive prices and with extended payment plans of up to 10 years.

Amongst the different residential unit types, villas particularly in New Cairo were the most sought after. These appreciated by up to 16% throughout the year. In some areas like the 6th of October City experienced an increase of 17% and 14% in apartment and villa rentals respectively. This is largely because home owners await the completion of their off-plan property.

The entry of new multinational firms into the market

The office sector saw continued growth with the relocation of local businesses and the entry of new multinational firms into the market. Business offices associated with gated residential developments in New Cairo were the most attractive to investors. Due to this reason rental rates have increased by more than 10% over 2018.

New projects that help to attract foreign buyers

In Cairo approximately 18,000 residential units were added to the market in 2018, which is the highest figure seen for several years. During 2019, the same figures are expected as more developments are likely to be completed in time for 2020.

More opportunities are coming to fruition with plans to create 20 new smart cities across Egypt. Some of these new cities around Cairo include the addition of 78,000 acres in New 6th of October, 32,000 acres in Sphinx City and 6,000 acres in New Mansoura City.

Amongst those cities we find the New Administrative Capital and New Alamein City (see the video below).

Several new developments offering world-class facilities are planned that will not only cater to local demand but also attract overseas property investors.