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The dynamics of housing prices in Egypt remain unstable: the nationwide real estate index adjusted for inflation fell by 14.09% per year by the end of the second quarter of 2022 after an increase of 1.57% year-on-year in the previous quarter and a decrease of 3.68% a year ago. Real house prices fell by 12.27% in the second quarter of the year.
The impact of inflation. House prices fell by a modest 2.92% over the year to the end of the second quarter of 2022 amid a surge in inflation in nominal terms. In July 2022, annual inflation accelerated to 13.6%, the highest since May 2019 and well above the central bank's target range of 5% to 9%.
Purchase restrictions have been lifted. President Abdel Fattah el-Sisi recently lifted restrictions on foreign ownership of land and real estate in Egypt to support the housing market. He also allowed the government, Egypt's largest landowner, to use its land for public-private partnership schemes. These improvements, combined with fundamentally strong local demand, are expected to boost the housing market in the coming years.
Prices and profitability. The average cost of an apartment in Cairo is $831 per sq.m. Apartments in the city center with an area of 120 sq.m can be purchased for $124,650 and rented out for $977 per month. Thus, the annual yield will be 9.04%.
Economy. Egypt has successfully weathered the adverse effects of the COVID-19 pandemic: its real GDP grew by 3.6% in 2020 and by another 3.3% in 2021. The economy has grown by an average of 4.8% over the past five years, as various economic reforms have successfully stimulated business investment and private consumption in the country. According to forecasts by the International Monetary Fund (IMF), Egypt's economy will grow by 5.9% this year.
Also read:
The Сitizenship by Investment Program of Egypt. How to Get It and Why
The Forecast for Egyptian Real Estate Market. What to Expect
Source: Global Property Guide
Photo by Sherif Moharram on Unsplash
