The Egyptian real estate market is expecting a significant price jump. According to Al Arabiya TV channel, citing leading Egyptian developers, in the coming months, the cost of housing may increase by 20%. The reason is a combination of economic problems and the aggravation of the geopolitical situation due to the escalation of the conflict between the United States, Israel and Iran.
Among the key reasons for the upcoming rise in prices, experts identify:
1. The abolition of subsidies. The reduction of government subsidies for natural gas has hit the cost of building materials.
2. Currency swings. The continued weakening of the Egyptian pound (the exchange rate rose from 47.2 to 50.2 EGP per dollar) makes imported resources such as metal and blanks much more expensive.
3. Rising costs.The production costs of construction companies are steadily increasing, forcing them to shift the burden onto the shoulders of buyers.
Experts warn that if the regional conflict drags on, price pressure will increase, which will lead to new price increases.
The tension is felt throughout the market. Buyers are faced not only with rising prices, but also with delays in the delivery of facilities. The investment attractiveness of Egyptian real estate is also declining: the total return on ownership has decreased, forcing many to reconsider the view of housing as a reliable asset.
However, there is a downside to any crisis. Some market participants see new opportunities in the escalation of the conflict in the Middle East. According to a number of developers, instability in the Persian Gulf countries may redirect investment flows to Egypt.
Amid the chaos, Egypt is beginning to be viewed by Gulf investors as a relatively safe haven. Demand is projected to shift towards ready-made housing and hotel real estate. These segments provide high liquidity and are able to generate stable income even in conditions of turbulence, unlike new buildings in the initial stages.Source: Egyptian Streets
