The tourism industry has long been an important part of Egypt’s economy, significantly impacting its real estate market. As one of the most popular tourist destinations globally, tourism has fueled the growth and development of the real estate market, particularly in coastal areas and historical sites.

The increasing popularity of tourism has led to a surge in demand for real estate in Egypt, attracting many investors seeking to capitalize on growth opportunities. This high demand has resulted in the construction of new hotels, resorts, and other tourism-related properties, including vacation homes and rental properties.

Coastal areas of Egypt, such as the Red Sea coast and the North Coast, have seen significant development in recent years, with luxurious resorts and private communities being constructed. These properties offer exclusive amenities and services to attract high-end tourists and investors.

The government recognizes the potential of tourism to drive growth and development in the real estate market and has implemented policies to attract more foreign investment and encourage the development of tourism-related properties.

Tourism Boom

Sherif Fathi, Minister of Tourism and Antiquities, stated that Egypt attracted a record 15.7 mn tourists in 2024, surpassing the previous year’s record of 14.9 mn.

In a statement issued by the Ministry of Tourism following his participation in a meeting of the Senate Committee on Culture, Tourism, Antiquities, and Media, Fathi also announced plans to establish an Investment Opportunities Bank to prepare a unified investment map of all available tourism investment opportunities and promote them both domestically and internationally.

Additionally, Fathi projected the addition of 40,000 new hotel rooms to Egypt’s current capacity in the coming period.

Moreover, a recent UN Tourism report ranked Egypt first in Africa for tourism revenues in 2024, which reached a record $14.1 bn.

Notably, the Egyptian government has developed a national tourism strategy aimed at attracting 30 mn tourists by 2028 by expanding capacity and improving the tourist experience.

Strong Performance

Savills Egypt, the local office of the leading global real estate advisor, has reported a significant increase in real estate sales rates along the North Coast, particularly in Ras El Hekma, which has emerged as a standout location. This surge in sales can largely be attributed to the landmark agreement signed in March 2024 between the Egyptian government and Abu Dhabi Developmental Holding Company (ADQ), aimed at transforming the region’s real estate landscape.

“Year-on-year sales rates have shown tremendous growth,” said Catesby Langer-Paget, Head of Savills Egypt Office. “Beyond the pivotal ADQ deal, several factors are driving demand in the North Coast market. The area is fast becoming a prominent regional tourist destination, attracting a broad customer base that includes both Egyptians and GCC nationals. There is also a growing trend among Egyptians purchasing smaller second homes in emerging areas like Dabaa, Ras El Hekma, and Sidi Henish, primarily for investment purposes. Additionally, increased rental demand from GCC nationals and Egyptians living abroad is further bolstering market growth.”

Ras El Hekma has led the rise in yearly sales with a remarkable 75% increase, followed by Dabaa and Sidi Henish, both of which recorded a 68% rise. Premium developments have outperformed upscale units, experiencing growth that surpassed 71%, while upscale units saw a 64% increase. Among various unit types, townhouses and twin houses recorded the most significant increases in sales rates, reflecting their high demand in the market.

“Looking ahead, the North Coast market is expected to continue its upward trajectory over the next one to two years. With some developments extending their operations into mid-October, the region is gaining traction as an even more viable destination from an economic standpoint,” said Langer-Paget.

The anticipated hospitality developments are expected to target a broader segment of visitors, dispersing traffic across the entire coast rather than concentrating it in specific areas. This growth will be supported by a competitive landscape that diversifies offerings and attracts both end-users and investors.

According to Savills, the North Coast remains a highly attractive market for real estate investment, especially with ongoing infrastructure improvements that enhance the overall visitor experience. Additionally, enhancements in transportation and digital systems, such as advanced online guides and booking platforms, will allow visitors to navigate the region seamlessly and more effectively. Key developers have been launching second and third projects along the North Coast, while new players have been simultaneously entering the market, paving the way for an increase in supply to meet demand and enhancing the competitiveness of the North Coast as a key global tourist destination.

Positive Outlook

Nader Khozam, Chairman and CEO of Il Cazar Developments, stated that the government’s development initiatives in the North Coast, including numerous projects alongside Ras El Hekma City, will enable the region to operate year-round. This reflects a trend among both the state and developers to maintain continuous operations throughout the year.

During Invest-Gate’s roundtable titled “The Luxe Retreat: Exploring Second Home Property Investments as True Wealth Builders,” Khozam noted that there will be an annual increase in activity in the North Coast over the next three years, particularly due to the scarcity of land in the area, which will drive up the prices of all residential units in coastal regions.

Furthermore, Haitham Mohamed, CEO of Ora Developers Egypt, emphasized the shortage of available land in the North Coast and anticipated a rise in real estate prices in the near future.

He pointed out that the current buyers in the area primarily consist of Egyptians working abroad and Gulf clients, while a significant portion of local clients has shifted their investments toward bank certificates.

Conclusion

The burgeoning tourism sector in Egypt is significantly influencing coastal property values, transforming areas like the North Coast into prime investment destinations. With record tourist numbers and government initiatives aimed at expanding capacity, the demand for real estate continues to surge, particularly for luxury accommodations and vacation properties. As developments thrive and infrastructure improves, coastal regions are set for sustained growth, attracting both local and foreign investors. This dynamic interplay between tourism and real estate not only enhances property values but also promises to reshape Egypt’s coastal landscape for years to come.