Regional Statistics

Egypt’s property market surprisingly resilient

The Egyptian real estate market has been hard hit by civil unrest.  But the new government's recent economic and political stabilization, despite its appalling cost in terms of human rights, appears to have improved sentiment in all sectors of the Cairo real estate market during the second quarter of 2015, according to Jones Lang Lasalle.

Following President Abdel Fattah el-Sisi’s election in June 2014 there is new found confidence, despite the ongoing Islamic insurgency in Sinai and several terrorist attacks.

The announcement of the mega real estate project Cairo Capital elicited criticisms of unrealism, but the proof of the pudding will be in the eating.

Further boosting the market is Law 17/2015. ratified by President el-Sisi, which, apart from removing the last remaining restrictions on foreign ownership of land and property in Egypt, introduced rules allowing the government, the biggest landowner in Egypt, to contribute land to the private sector as part of public-private partnership schemes against a share of the revenue.

With an equity share of the profits from joint projects with the private sector, the government now becomes the country's largest property developer.

“This is very positive for the industry,” says Ahmed Badrawi. managing director of real estate developer Sodic. “Essentially, they are becoming partners with a share of the top line. It is a very new thing. We are now bidding for 900 acres in two plots under [this] new system of revenue sharing.”

He says Sodic reported its strongest earnings ever in 2014, and is sitting on a “healthy amount of cash for expansion”.

The average sales price of apartments in New Cairo rose by 8% during the year to the second quarter of 2015, and by 1% compared to the previous quarter. Villa sales prices however declined 7% y-o-y.

In 6th of October City. the average sales price of apartments rose 26% y-o-y in Q2 2015. Likewise, villa sales prices rose 23% year-on-year.