Around 7,000 real estate units were delivered in Egypt during the third quarter of 2023, bringing the total residential stock to 262,000 units in major gated communities, according to a report by global real estate advisory firm JLL MENA, as Egypt’s government streamlines procedures for foreigners to buy residential properties.
Investors are keen on exploring new opportunities or acquiring residential properties in Egypt for use as secondary residences or holiday retreats, the JLL MENA’s report on the Cairo Real Estate Market noted, which provided data on Egypt’s real estate in the third quarter of 2023.
Nearly 9,000 units are anticipated to be delivered during the final quarter of the year with increased interest from Gulf investors.
Luring in investors
The Egyptian Cabinet issued a decree in July allowing foreigners to purchase real estate properties without restrictions, but requiring them to pay for these units in hard currency and the amount must be deposited in a state-owned bank. This action functions mainly as a new pathway for Egypt to replenish its hard currency liquidity, chiefly the US dollar, which has been severely affected by global, regional, and local cascading crises.
“This strategic move is aimed at fostering increased inflows of foreign currency and facilitating investments. As an additional incentive, the law offers conditional citizenship and an array of benefits to prospective buyers,” the report stated. This is expected to attract a higher number of foreign investors, particularly from Gulf nations, who are keen on exploring new investment avenues or acquiring residential properties in Egypt for use as secondary residences or holiday retreats.
Looking ahead, the report noted that the upcoming projects in the pipeline mainly center on offering fully integrated mixed-use developments with higher ratios of green spaces to buildings.
“These developments aim to serve as comprehensive destinations for homeowners, offering a sense of community and privacy simultaneously,” the report explained.
The report also shed light on the impacts of the inflationary pressure in the country on the sector in the third quarter of 2023. It said that average sales prices jumped by around 40% and 45% on 6th October and New Cairo, respectively, on an annual basis. Over the same period, rental levels continued to accelerate at a fast pace, with annual increases of 22% on 6th October and 18% in New Cairo.
“This is mainly driven by the heightened demand and inflationary pressures in the country,” the report explained.
It also pointed out that despite the significant price hikes, the residential market has been gaining momentum, attributing this development to the continuing growing local demand to hedge against currency devaluation and soaring inflation.