Real estate prices are expected to rise in the upcoming period due to the increase in construction material prices, according to Ahmed Abdel Hamid, chairperson of the Building Materials Chamber at the Federation of Egyptian Industries (FEI), Daily News Egypt reported.

The recent rise in real estate activity in the Egyptian market, as well as the high price of construction materials, have contributed significantly to the increase in real estate prices throughout the sector, explained Abdel Hamid, according to Almal News.

The recent devaluation of the Egyptian pound against the US dollar is the driving force for the rise in  construction material prices, noted Abdel Hamid. The Egyptian pound is also expected to see another round of devaluation soon, he added.

Steel prices will increase in the upcoming period if energy subsidies for steel factories are lifted, said Ahmed Al Zainy, Head of the Building Materials Division at the Federation of Egyptian Chambers of Commerce (FEDCOC).

Al Zainy stresses the need for more new licenses for steel factories to increase production and competition, which would help in reducing prices. Low-income citizens will be affected the most by the price hike if energy prices increase, he added.

Production costs rose by 22% due to the higher building material prices, such as steel and cement, caused by the Egyptian pound’s deflation, said Ali Azzam, a real estate expert.

The Central Bank of Egypt devalued the Egyptian pound in March of this year, where the official US dollar is recorded at EGP 8.78, yet the informal market stands at EGP 11.10.