The real estate sector in Egypt is experiencing a strong surge.
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Egypt's real estate sector is experiencing a significant upsurge, driven by robust economic growth and recent government reforms, particularly the relaxation of foreign land ownership regulations. The country's real estate price index soared by 28.4% in February 2023 compared to the previous year, a notable acceleration from the 7.2% year-on-year increase in February 2022. However, when adjusted for inflation, real estate prices actually decreased by a modest 2.6% over the same period due to escalating inflation.
In 2022, real estate prices witnessed a substantial increase of 25.4%, following a rise of 3.6% in 2021 and a decline of 9.6% in 2020. President Abdel Fattah el-Sisi recently lifted the remaining restrictions on foreign land and property ownership in Egypt to stimulate the housing market. Furthermore, the government, being the largest landowner in the country, can now utilize its land for public-private partnership initiatives. These measures, along with strong local demand, are beginning to bolster the housing market and the overall economy.
The devaluation of the Egyptian pound in 2016 made real estate more appealing to wealthy Egyptians due to the currency depreciation against major currencies. Foreigners can also purchase property in Egypt under specific regulations. Moreover, various reforms have been implemented recently, including the introduction of a value-added tax (VAT), amendments to the Investment Law to attract more foreign investors, and reductions in fuel and electricity subsidies.
Additionally, Egypt has undertaken several mega-projects such as expanding the Suez Canal and constructing a new capital city to stimulate economic growth. The European Bank for Reconstruction and Development (EBRD) anticipates that structural reforms supported by IMF programs and the transition to a flexible exchange rate regime will alleviate external financing pressures and accelerate reforms.
Despite challenges like the COVID-19 pandemic, Egypt's economy has shown resilience, with positive GDP growth in recent years. Following a projected growth of 6.6% in 2022, the Egyptian economy is expected to expand by 4% in the current year according to the IMF. Egypt's housing market has experienced fluctuations in recent years due to various economic and political events, but efforts to stabilize and stimulate the market have shown promising results.