The American Chamber of Commerce in Egypt’s Real Estate Conference, held on January 27, offered a timely snapshot of a sector undergoing a structural reset. After years driven by inflation, currency depreciation, and speculative demand, Egypt’s real estate market is recalibrating toward a more disciplined phase, shaped by macroeconomic stabilization, product quality, and the early emergence of real estate as an export-driven industry.

The transition is gradual and uneven, but speakers agreed it is structural rather than cyclical.

Stabilization, without complacency

Opening the conference, Mohamed Youssef, CEO of Dcode Economic and Financial Consulting, framed Egypt’s economy as emerging from a prolonged period of overlapping shocks. While 2025 marked the start of stabilization, he cautioned that 2026 would be critical.

Inflation is easing, the exchange rate has become more predictable, and foreign reserves have reached record highs. At the same time, vulnerabilities remain—particularly external debt levels, energy constraints, and weak export capacity. Balance of payments data for FY 2024/2025 show improvement, driven by a 66% rise in workers’ remittances and sustained tourism inflows. These factors have underpinned near-term stability, though Youssef stressed that long-term resilience depends on productivity gains and export growth.

For real estate, Youssef noted that the inflationary period between 2022 and mid-2024—when inflation significantly outpaced interest rates—eroded real household wealth. As inflation moderates, restoring purchasing power, rather than fueling further price appreciation, will be key to sustaining demand.

Diverging performance across asset classes

From a market standpoint, Ayman Sami, Country Head of JLL Egypt, highlighted growing divergence across asset classes.

The office sector remains among the strongest performers, supported by multinational demand, outsourcing activity, and a shortage of Grade-A supply. Vacancy rates in prime developments have fallen below 5%, with rental growth expected to continue.

In residential real estate, supply growth reflects the delivery of units sold during peak sales cycles. While prices increased by 16% to 22% last year, momentum is moderating, signaling a shift away from price-led growth toward competition based on product quality, pricing structures, and delivery capability.

Retail continues to adapt to constrained purchasing power through more flexible leasing models and risk-sharing arrangements, while hospitality stands out as a growth engine. Tourist arrivals reached 19 million in 2024, up 21% year-on-year. Meanwhile, property exports—though still modest—rose sharply by about 200% to $1.5 billion, pointing to early traction in foreign demand.

Real estate beyond asset creation

These themes converged during a panel discussion titled “Real Estate as a Catalyst for Economic Growth: Urbanization, Infrastructure and New Cities,” which examined how the sector’s role is evolving beyond asset creation toward long-term economic and urban resilience.

A recurring conclusion was that the ongoing market correction is structural, driven by financing conditions and product differentiation—not a price collapse.

Hazem Helal, CEO of OWest, emphasized the importance of community vitality alongside expansion. “Urban development should not be reduced to construction volume alone,” he said. “Expanding cities without sustaining community energy eventually weakens them. The next phase must focus on creating resilient, lived-in environments, not just built-up areas.”

Helal also pointed to easing financial conditions as a key demand driver. “The correction is not about prices collapsing. It is about extended payment terms, easing interest rates, and making real estate accessible again without eroding its long-term value.”

Correction through product, not prices

Ahmed Fathy, Co-CEO of Misr Italia Properties, echoed the view that the current phase reflects market maturity. “Real estate is part of a much bigger economic equation,” he said, noting that competition is increasingly benefiting end users and pushing developers toward innovation.

According to Fathy, correction is occurring at the level of design and usability. “We still see premium projects selling out within hours,” he said. “The real correction is in delivering the right space, functionality, and pricing structure, not in cutting prices.” In retail, he added, the balance of power has shifted, with landlords increasingly competing for tenants.

Pricing, promotion, and the export gap

Ayman Amer, Co-Chair of AmCham’s Real Estate Committee and General Manager of SODIC, challenged the notion that Egyptian real estate is overpriced. Benchmarked in dollar terms, he argued, Egypt remains significantly cheaper than regional and global peers.

“If we price in dollars rather than Egyptian pounds, the story changes completely,” Amer said. “Top-tier real estate in Egypt averages around $3,000 per square meter, compared to $6,000–$7,000 in the GCC and around $10,000 in Europe.”

Despite this pricing advantage, foreign buyers account for only about 3% of total transactions. Amer attributed this gap to weak international marketing rather than structural barriers. “It is not realistic for Egypt to sell just 3% of its inventory to foreigners,” he said, adding that sustained visibility “cannot depend on word of mouth alone.”

He also called for product designs better aligned with cultural preferences—favoring spacious layouts over smaller units—and for coordinated promotion linking tourism and real estate internationally.

The Red Sea as a long-term export bet

While Cairo and the North Coast continue to dominate domestic activity, the Red Sea is increasingly viewed as Egypt’s most scalable real estate export platform, underpinned by tourism flows and international demand.

This theme was explored further in an exclusive sideline interview with Rami Hegazy, CEO of Ayaan Developments, who framed the Red Sea as a long-term foreign investment corridor rather than a seasonal resort market.

Demand in the region, he said, is structurally different from domestic residential markets, driven largely by foreign buyers seeking lifestyle assets and long-term value. However, access remains constrained by large land parcels and capital-intensive infrastructure requirements, favoring major developers.

“Even when land prices appear lower than the North Coast, the economics change entirely because of scale,” Hegazy said. He added it is not a pricing issue—it is a structural one.

Ahmed Hegazy, Managing Director of Ayaan Developments, stressed that credibility and delivery are decisive for attracting foreign capital. “Developers need to satisfy local buyers while remaining credible for foreign investors,” he said, pointing to infrastructure, healthcare, education, and transport as critical value drivers.

Both executives highlighted national infrastructure projects—particularly new airports and the high-speed rail corridor linking Sokhna to Alamein—as transformational. “Infrastructure turns destinations into markets,” Rami Hegazy said. “Without it, you have projects. With it, you build cities.”

A market redefined

The overarching consensus from the conference was clear: Egypt’s real estate sector is no longer driven primarily by speculation or currency hedging. The next phase will be shaped by macroeconomic normalization, disciplined product development, digitalization, and targeted international promotion.

As Youssef concluded, stabilization is underway but remains fragile. For developers and investors alike, success will depend less on timing the cycle and more on navigating the structural realities of affordability, infrastructure readiness, and global competitiveness.