For local real estate pundits, it’s hard not to see that homes have become more expensive. Aqar Sky, a real estate sales platform, estimated the price per square meter for residential units in 2025 has jumped 30% over 2024 in locations that haven’t changed much, like central Cairo, Sheikh Zayed and downtown New Cairo. Meanwhile, prices have nearly doubled in locations where development is accelerating, such as New Zayed and other suburbs of new cities.

The Central Bank (CBE) noted that the housing price-to-income ratio has increased nearly 80% since 2022. In December, AUC’s Alternative Policy Solutions (APS), a research initiative, found that “around 54.3% of Egyptians … cannot comfortably afford housing.”

Residential unaffordability has been a long-standing problem. “Egypt had been experiencing a housing crisis in the 1960s when the government first embarked on projects to meet the needs of the growing urban population,” said the APS paper.

As it stands today, the government is leading home construction for low and middle income buyers, while local private developers mostly refrain. “Middle-income housing projects [have] lower profit margins compared to luxury developments,” noted a report from Mortgage Bankers Association (MBA) published in June.

That dynamic needs to change. “Real estate developers have a responsibility to support housing affordability by developing appropriate housing, employing progressive economic mechanisms, and adhering to administrative guidelines,” the MBA said. However, such a shift could prove difficult.

 

 

Unaffordable market

In October, one of the largest local developers with projects in East and West Cairo started offering 125-square-meter units at prices starting at EGP 8.46 million (about $178,000), with a down payment of 5% and installments spread over eight years.

Buyers would have to fork out an EGP 423,000 down payment, leaving just over EGP 8 million to be paid over 96 months. Assuming no interest payments, monthly installments would be over EGP 83,700.

In September, a developer with a similarly diverse footprint announced down payments ranging from 1.5% to 5% with installments spread over 10 to 12 years, depending on the project. One project’s prices start at EGP 8 million with a 1.5% downpayment and installments over 12 years. That means monthly installments, without interest, would be more than EGP 54,700.

Such prices mean the bulk of the population is locked out. Zimyo and Time Doctor, two consultancies, agreed the average salary in Egypt was EGP 9,200 per month as of 2024, and that the average raise is 9% every 17 months. Remote People, an online hiring platform, put the average monthly salary in Egypt at EGP 14,317,  while Time Champ, a consultancy, set it at EGP 13,244.

In July, the CBE said individuals making up to EGP 12,000 and families making at most EGP 15,000, if married, “cover the bottom 40% of earners.”

The APS report outlined several explanations for growing unaffordability.

First is “changes in construction costs, [resulting from] exogenous shocks.” Second is that “governmental regulation restricts the responsiveness of the housing sector to fluctuations in demand, rendering housing more unaffordable,” the report said.

Meanwhile, A-class and higher segments are a priority for private sector developers, “since only high-income individuals experience real growth in their earnings. They drive demand, putting housing out of reach for low-income households,”  the APS report said. “Similarly, … economic growth in urban and metropolitan centers leads to an increase in incomes, which in effect raises the demand for housing.”

There also is “induced migration theory, [which] expects that high-income households migrating into urban areas from both within the country and abroad will be primarily attracted to conveniently located big cities with adequate utilities, which further boosts housing prices.”

Fifth is that Egypt’s “housing prices increase despite relative stagnation in household incomes,” making them prime options for those purchasing property to protect and bolster their wealth.

Government efforts

“The Ministry of Housing, Utilities and Urban Communities (MoHUUC) is preparing to launch a new range of housing units for low- and middle-income citizens,” said the Official Egyptian Real Estate Platform (OEREP), which is state-owned. “These projects, part of the ministry’s ongoing initiatives, aim to provide affordable homes across various new cities.” For middle-income citizens, there is “a new phase of Sakan Misr apartments.”

The ministry’s installment plan structure for middle-income homes is similar to that of the private sector. There is “an initial payment of 10% of the unit price, plus 1% administrative fees and 0.5% for the board of trustees,” the platform said. “A 5% maintenance deposit is required upon signing the contract, along with an additional 5% at the time of delivery,” the OEREP said. Installment periods range from three to 10 years, “with interest calculated based on the current Central Bank of Egypt rate, plus 2% and 0.5% collection fees.”

For low-income individuals, payments could stretch over 30 years and give “financial aid up to EGP 60,000, in addition to subsidies on the land price and interest rate support provided by banks and mortgage finance companies,” noted the OEREP.

To prevent traders from buying government-sponsored units at low prices and selling them to individuals at markups, each individual is only allowed one unit. Additionally, MoHUUC said, “Prices will be determined by relevant pricing committees,” indicating they could change with time.

“These new initiatives [should be enough to] address the housing needs of low- and middle-income Egyptians, ensuring affordable and accessible housing options across the country,” said the OEREP.

Funding solution

In July, the CBE published a report highlighting its vision of “Egypt’s affordable housing finance model.” Its primary focus points are “innovation, inclusion and sustainability.”

The program included the MoHUUC, which “set strategic goals”;  the New Urban Communities Authority, which “provided free land;” the Ministry of Finance, which secured subsidies; the Ministry of Information and Communication Technology, which provided the infrastructure; and the Ministry of Social Solidarity, which identified vulnerable groups to ensure their quotas are met in development.

Also, 30 commercial banks and local mortgage finance companies were included in the CBE’s funding program, along with 2,000 private sector contractors and 11 investigation and tech firms to ensure the application platform’s security.

In response to increasing home prices, the CBE program raised “cash subsidies … from [between] EGP 5,000 and EGP 40,000 [in] 2024 to [between] EGP 5,200 to EGP 125,000 [in] 2025, with interest subsidies holding loans at 3% to 8%.”

Additionally, the CBE offers eligible low-income buyers 30-year payment plans that “reduce payments to EGP 2,500 for EGP 700,000 units, affordable for EGP 12,000 earners.”

The CBE also includes support packages for sustainable construction. To be eligible, a developer needs to adopt “energy saving” solutions such as “double-glazed windows, thermal plaster, LED lighting and 888 solar panels.”

Water conservation requires developers to use “dual-flush toilets, aerated faucets and greywater recycling.” To conserve water, they must use “recycled concrete, wood and metal for landscaping and roads.” Lastly, carbon dioxide reduction is encouraged by using “low-carbon cement and renewables.”

The report said the CBE’s “ambition is to build 80,000 green units by 2026, with 30,000 pursuing EDGE certification (20% percent efficiency in energy, water and materials).”

The document noted, “initial cost barriers (10% higher than traditionally built homes) would be  offset by the World Bank’s $100 million and optimized designs …  saving EGP 50,000 per unit.”

Next step: renting

When it comes to local ownership models, the government, Central  Bank and the few private developers who build affordable homes want to sell, not rent, units.

According to the APS, renting is now only possible through property owners and has been unregulated since 1996. That format runs alongside the pre-1996 rent system of rent caps and open-ended contracts that could be inherited once.

As it stands, post-1996 rents are “well beyond the means of low-income individuals and households,” the APS paper said, estimating it eats 39% of average monthly income. For a unit to target middle-income families, the report says rent should not exceed 25% of monthly income.

As of December, “renters made up only 14% of all households, representing a total of 3.3 million households. Almost half of these households, 1.6 million, are beneficiaries of the old rent system,” said the APS.

These low percentages compound Egypt’s middle-income home affordability problem. “Middle-income renters [are] a core and increasingly vulnerable segment of the economy [who] face significant challenges in securing affordable and suitable housing,” said the MBA report. “Despite earning income levels that are above those who qualify for traditional, affordable housing programs, they often cannot afford market-rate rentals, leaving them in a precarious situation.”

Another problem for middle-income families comes from the “lack of adequate housing for low-income families, [pushing them to] occupy a unit at a slightly higher [rent] bracket that a middle-income family could have otherwise occupied,” the MBA report said.

To address housing needs of that middle-of-the-road segment, the report stressed “the need for common definitions in middle-income rental housing,” which is “one of the fundamental barriers to addressing [their] housing [shortage] crisis.”

The MBA report added that in the United States, similar to Egypt, neither the government nor federal (central) bank defines an income bracket for the middle class. The APS paper noted a further complication arising from Egypt’s lack of accurate income figures.

Private sector role

The MBA report stressed “public-private partnerships [are] essential to filling the middle-income rental housing gap,” as it is one of the most effective strategies for addressing home affordability.

To “incentivize development,” the report highlighted “offering tax credits, property tax abatements, lower-interest loans and other financial incentives.” These developers would get more benefits if they rented those units.

Another approach involves “land use and zoning flexibility,” the MBA report said. That allows developers to “increase density and mixed-use developments.”

Third is for the government to share risk with private developers and offer them innovative financing options. “These collaborations are particularly effective in addressing the middle-income rental market, where traditional financial models may not suffice, given the lower rents these properties generate compared to properties that are entirely market rate,” the MBA report said.

The APS urges legislative support for “creative rent-to-own schemes that allow tenants to contribute a percentage of their rent toward purchasing the home they already reside in.”

Plugging gaps

Ultimately, the CBE stressed more government oversight is required. “Despite decades of government efforts to resolve housing affordability, notable policy gaps persist in Egypt, which hinder the achievement of sustainable solutions to a decades-long crisis. These gaps are the result of a confluence of long-standing systematic issues, socioeconomic difficulties and structural problems within the housing industry.”

Exacerbating those problems is a “considerable lack of coordination and participation among stakeholders within the housing sector,” the CBE said. “The divided top-down nature of decision-making and the siloed approach prevent the implementation of coherent and successful methods.”

To overcome that, the CBE paper stressed the need for “collaboration between government organizations, private developers, real estate organizations and, most importantly, low-income households and individuals who will be the beneficiaries of these programs. This cooperation, it said, “is crucial to bridge the gaps in policy.”

Whatever a new system looks like, it must “equalize demand-side and supply-side interventions to ensure that the supply meets the actual demand,” the CBE said. “The government must also put a rigorous monitoring and evaluation framework in place, which can support its efforts in upgrading social housing programs.”