Despite the current economic conditions, purchasing power is dominant. Everybody looks for a suitable unit to invest in, despite the low inventory, as the demand is much higher than the supply.
As a managing director at New Avenue Real Estate Consultancy, my team and I dealt with the real estate market’s ups and downs over the past 10 years.
To help our clients find the best residential and commercial units in the market, we have primarily provided consultations and brokerage services. Every shift in the market created a challenge as well as an opportunity.
“Real estate is one of Egypt’s assets that always connects the present to the future by providing development that people can rely on.” Ahmed El-Desouky – Managing Director at New Avenue
In order to help you easily make your decision while buying or renting in Egypt, Ahmed El Desouky, Managing Director at New Avenue Real Estate Consultancy, will give you a brief overview of the real estate market.
This is in addition to the main opportunities and challenges its stakeholders face and how they eventually affect the end user.
1. What Challenges and Opportunities Face Egypt’s Real Estate Market?
Challenges
Indeed, the entire sector is under pressure as a result of the economic crisis in Egypt. All goods, including real estate products, have seen price increases due to continuous rise in inflation rates.
In addition, it took a lot of time for many real estate developers to control the repricing process the way they desired. At the same time, this time frame was sufficient to position premium products in a way that attracts clients looking for prestigious homes and reliable investments.
While real estate brokers deal with a different kind of difficulty that is primarily brought on by competition. For many business owners, breaking into the brokerage market might not be difficult.
This, unfortunately, reduces the quality of the consultant’s functions and eventually the suitability of the recommended property.
Moreover, for real estate clients, this poses a significant challenge. They get frustrated faster when they don’t find the unit they’re looking for.
Despite the fact that there are a lot of real estate experts and consultants on the market, it can be difficult for buyers to find a qualified real estate consultant to help them with their search.
Opportunities
On the other hand, there are now many chances to catch up for both end users and real estate investors.
The devaluation of the Egyptian pound becomes an opportunity for Egyptian living in the GCC, who find turning their savings into properties is an intelligent solution.
Opportunities also arise from a variety of other factors, including Egypt’s large population (over 110 million people). The belief that real estate is a secure investment spans all age groups. This makes buying properties an unstoppable activity in the country.
2. What Are the Available Types of Real Estate Financing in Egypt?
There are two ways to buy a unit if the cost is prohibitive and the client can’t pay the entire sum in cash.
- The First Way: It’s through the real estate developer, who will receive a down payment. The remaining balance will be paid in installments over 8 years, the maximum allowed in the current Egyptian market.
- The Second Way: The bank is involved in the second strategy. The developer’s financing procedure is followed by mortgage financing but with longer repayment terms.
The procedure to protect the bank’s financial interests gets more difficult as it pays the developer the unit price.
However, many Egyptian banks are currently working to make mortgage financing easier. The high level of interest is the main challenge this method faces.
3. What Do You Think of Mortgage Financing in Egypt?
In New Avenue, we believe that bank mortgage financing hasn’t reached peak traffic and it has more to give in the future.
This motivated us to sign a partnership contract with ADIB (Abu Dhabi Islamic Bank) to be a part of an initiative that encourages this approach.
As always, knowledge is power! It will be easier for you to purchase the home of your dreams if you are aware of all the opportunities and difficulties that Egypt’s market is currently facing.
That’s why this interview is brought to you by Property Finder to easily find your new home and confidently make your decision.
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