Leading a fierce competition across its eight operating markets, namely Egypt, Saudi Arabia, Lebanon, UAE, Qatar, Bahrain, Morocco, and Turkey, the- Dubai-headquartered- online property-listing platform stands optimistic on Egypt. Invest-Gate talks to Founder and CEO of Propertyfinder Group Michael Lahyani along with the company’s Managing Director Mohamed Hammad about their expanding business, highlighting the challenges they face and their ability to secure a leading position in a market they believe, “stands very strong.”
How do you view the Egyptian real estate market, especially following the floatation of the pound? And how do you foresee its performance in the near future?
Lahyani: Egypt has recently witnessed some difficult times with a number of major economic changes, yet the market has high potential and we are very optimistic about its future. The Egyptian real estate market is very strong, stirred by high demand because of its demography. We are absolutely confident that Egypt is going to be one of the biggest and most booming real estate markets in the Middle East and even more.
Hammad: Due to the pound float, real estate prices increased by 1.5-1.6% only. Fearing price hikes on sales, many developers reduced their profit margin instead of increasing their prices to be able to sell more and grow further.
On another note, the EGP floatation made the real estate market attractive and lured in foreign investors and Egyptian expats as the market prices became cheap to them. There is an estimate of 800,000 marriages annually,
fueling the demand on real estate.
What challenges did Propertyfinder face in Egypt ?
Lahyani: When we first launched our services back in 2012, Egypt was in the midst of a political turmoil… we needed to work closely and patiently with developers and brokers. We continued to invest in our operations here and did not get scared and leave.
The real estate digital platform was new to Egypt back then and we worked on educating the market and presenting the benefits of digital advertising to developers. Finally, we had the challenge of building a strong team and finding the right talents. Not many were exposed to this technology back then, even from the employees side.
There are a number of similar property-listing websites popping up in the country, how do you keep your edge?
Lahyani: We keep our edge through two ways, first of which, is to always keep consumers in mind. We know that consumers search for the quality, so we work with professional real estate agents and do not allow individuals to
come and list on the portal.
Second, we make sure that our website is available to the users anytime, anywhere, and on any device, and that is how we stay ahead of the competition. Quality of the website is a priority for us because consumers will leave if it is slow; our website is mobile friendly and working on all mobile systems. We also have an application.
What key trends have you noticed in the Egyptian real estate market as well as the Emirati real estate market?
Hammad: In Egypt, the market is always developing and seeing increasing investments. As for the key trends, New Cairo is acquiring the largest share of consumer interest, yet the New Administrative Capital started to witness a high demand.
Lahyani: There are many new developments taking place in the UAE, and the trend for the past three years is the decline of prices on an average of 5-10% per year, which is a sign for a healthy market as it has become more affordable for people to buy.
We always hear talks of a real estate bubble, especially with the rising prices of real estate. Do you think there is a real estate bubble in Egypt and the UAE?
Hammad: There will not be a real estate bubble in Egypt unless banks get very involved in the market and give loans. We have a weak mortgage system in Egypt so no real estate bubble is expected. The Egyptian market is strong and stands firm. As for real estate prices, they may stabilize but they will not go down.
Lahyani: The only market that really had a real estate bubble in Middle East was UAE in 2008-2009 because the banking system was providing mortgages and loans to people who could not pay their mortgages later, resulting in a default.
In the other Middle Eastern markets, the banking system is not the same when it comes to mortgages, which are quit a new concept. There is no sign of a bubble happening in Egypt; real people are buying units with their own money despite the increase in prices.
Let’s talk regionally, you have recently acquired a share in Turkish property portal Zingat.com, can you explain this move? And what other Middle Eastern countries do you want to expand in?
Lahyani: When looking to expand regionally, we look at big-sized markets that are exciting for us to expand to outside Dubai. Turkey is the first market that we enter with a minority acquisition. Turkey has a different language than Arabic; we know how to operate in English- and Arabic-speaking markets but it is quite different when it comes to the Turkish language. We did not want to go and build it ourselves so we searched for the most promising team and fastest-growing property portal, and we found Zingat. We plan to invest more in Turkey if Zingat continues to grow the way it is now.
We already have eight markets and we are the top in four markets which are the UAE, Qatar, Bahrain, and Lebanon. Our current focus is to secure the top position in the other markets and this requires investments and attention, as well as work from my team and I to pass on the knowledge to all of the remaining markets. We want to be careful not to expand to too many markets. Winner takes all so we want to make sure we are the winners in our current markets.
In your opinion, what are the rising real estate markets in the region and where do you expect most growth?
Lahyani: Any rising real estate market is based on the population of the country. For us, the three big markets we focus on are Egypt, Saudi Arabia, and Turkey where we see the most potential investment opportunities. Egypt has a large population with a lot of young people in need for new homes. It also has an economy that is stable and good, or at least becoming better. For Saudi Arabia, the real estate market will take another two or three years to rise, but we are expecting that the reforms put in place by Crown Prince Mohammed bin Salman will start to have an effect so we will see a big boom in the coming period. Turkey also has a strong economy and growing real estate market.