Due to the cost increase following the 2% increase in interest rates and the approval of a flexible exchange rate for the pound, several real estate companies in Egypt raised the prices they charged for selling their housing units by 10% to 15%. Other companies suspended sales until the exchange rate stabilised.
Since residential real estate in Egypt serves as a store of value, Ayman Sami, director of JLL, claimed that the floating exchange rate for the pound and high interest rates have an impact on real estate prices. This increase is the result of people investing their money in residential real estate, which raises real estate prices, particularly after the pound’s exchange rate dropped by 35% since the year’s beginning.
According to a recent estimate, prices will rise for all sorts of real estate, including office, commercial, residential, and entertainment properties, to account for the increase in building costs brought on by the deregulation of the pound exchange rate.
While Wael Ezz El-Din, CEO of Mountain View’s commercial division, announced that the business will “increasing the prices of units between 10% and 12% progressively, starting this week,” he also predicted that a new rise of 10% would be approved by mid-2023.
“The construction costs will escalate by about 10% to 12% due to the liberation of the pound,” predicts real estate analyst Youssef Al-Banna, “which may push some companies to stop the sale in part and not to offer new stages or projects, until the pricing process is clear, in order to maintain the profitability of their projects.” According to estimates, prices in Egypt will rise steadily between 18% and 20% by the end of the first half of 2023.
However, according to many Saudi Egyptian Development Company managers, the company has halted sales in all of its projects until the currency rate is known and the new pricing structure is researched. This is something that a number of other businesses have also done.
Keep in mind that the real estate industry in Egypt contributes roughly 20% of the country’s GDP and is expanding thanks to a rising population as well as a 2% annual shift of people from the countryside to the metropolis.
Following the decline in the value of the pound, expectations for real estate prices increased by 15%.
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