Rising Concerns Over Egypt's Real Estate Market
In recent months, Egypt has witnessed a significant surge in real estate prices, prompting fears of a potential bubble. This concern arises amidst an economic crisis that has persisted since 2022, leading many to view real estate as a safe haven against the plummeting value of the Egyptian pound. The construction sector, which contributes around 18% to the country's GDP, is under scrutiny as prices continue to rise, with some reports estimating the real estate market's size at approximately $50 billion and projecting growth to $76 billion by 2029.
Economic Factors Driving Demand
The rapid population growth of nearly two million people annually is a critical factor driving the demand for housing in Egypt, necessitating the construction of 200,000 new housing units each year. Despite the challenges, the Egyptian government remains optimistic, asserting that the demand for real estate is robust. Housing Minister Sherif El-Sherbiny emphasized that fluctuations in demand do not equate to a bubble, indicating a strong market driven by ongoing population needs and investments.
Divergent Views on Market Stability
Economists are divided on the stability of the real estate market. While some experts, like finance professor Medhat Nafeh, argue that current price increases are unsustainable and could lead to a bubble, others, including Fathallah Fawzy from the Egyptian Businessmen Association, assert that the market is thriving, with sales tripling in the first half of 2023 compared to the previous year. The contrasting perspectives highlight a complex landscape where speculation and genuine demand coexist, raising questions about the future trajectory of Egypt's real estate sector.
