Rhodes: In 2017, The Egyptian Market Will Be Interesting

Rhodes: In 2017, The Egyptian Market Will Be Interesting

In light of  the recent economic changes resulting from the float of the EGP and newly imposed taxation policies, a lot of questions are to be answered concerning the real estate market nowadays. Tom Rhodes, Cityscape exhibition director, spoke exclusively with Invest-Gate about the challenges awaiting the Egyptian real estate market, suggestions for a prospering sectors, and expectations for 2017.

What is in store for the Egyptian real estate industry during 2017?

The real estate market is going through an interesting phase as we enter 2017. The flotation of the pound that occurred last November has had an impact on construction costs of every project being implemented, which triggered developers to increase their prices by 20% to 30%. This will continue in 2017 with devaluation; I expect developers to increase their prices by another 20% this year as they will seek to balance the costs and avoid dropping yields.

How can a good partnership be maintained between the Egyptian government and private developers?

The main factor in establishing a good partnership lies in land value; if we look at the exchange rate, we will be able to notice the effect it has on incoming costs of materials that can be supported by the land value offered to developers. If there are lower land prices being offered to developers, then that will benefit the market greatly and ensure that the unit’s final price is offered at a reasonable and affordable rate.

How do you think Egypt can maintain its real estate wealth, especially when it comes to old buildings?

The market in Egypt is underutilized, you do not see facility management firms growing often in the MENA region as a whole, not just Egypt. Either owners maintain their own properties or developers offer maintenance as a separate service, although if facility management firms should take place in the country, they should focus on making sure construction is right in the first place and that the building will last longer.

What can attract foreign investors to the Egyptian market?

There is legislation in place that could potentially improve and make the real estate market more attractive for investors. However, at the current moment the value of foreign currency acts as a positive endeavor to encourage foreign investors to overlook the market. Now is a good time for expats to invest in Cairo. If they are looking for a second home and they are getting paid income in foreign currency, then this will definitely allows them to purchase a property for half the price or own multiple properties.

Do you think we are heading to a real estate bubble?

I do not think that Egypt is heading to a real estate bubble due to the new legislation such as the newly issued investment law, which will benefit and help the market stabilize on the long term. However, on the short term there might be raising difficulties just as everyone is waiting to see how the currency will stabilize later on.

What is an estimate of the current demand on real estate?

The demand is currently high from my point of view. Real estate in Egypt has always been seen as a safe haven for investment, even after the devaluation. Buyers and investors are looking to how they can benefit from the increasing prices of their purchased properties.

What are the possibilities of real estate price increasing or decreasing in the upcoming period?

I think that prices will stabilize over time and it all relies on import costs; if the price of imported goods and materials stabilize, the prices of real estate consequently will too. However, I see the prices are subject to increase in the upcoming 12 months.

How can affordable housing be implemented in Egypt to attract demand amid Egyptians’ struggles with recent Inflation?

I think this has been a key issue for a while now, with the different prices emerging, the Value Added Tax, and different legislation affecting the regular Egyptian citizen in the street. These factors all work together to create an increased requirement for affordable housing, which should be a key focus for the government to move forward as well.

What do you think the amendments of the new Investment law should have included?

I think the law should currently focus on attracting foreign investments, which is something that has been in shortage in the past few years. However, now international investors have a positive prospect when considering investment in Egypt since, to them, prices are lower here. The law should also ensure that the bureaucracy in Egypt should be further facilitated to allow foreign investors to easily step in the market.

Cityscape is the country’s leading international property exhibition gathering up to 100,000 developers under one roof. The four-day event is to take place at the Cairo International Convention Center from March 31 till April 3.

Fatma Khaled 379 Posts

An aspiring journalist always seeking to deliver the best of everyday's news. I am a very enthusiastic Egyptian who is committed to journalism and what I could give as a journalist/ writer through reporting on business and political news.


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