Tarek Hegazy: Egypt’s Real Estate Continues To Push Forward

Tarek Hegazy: Egypt’s Real Estate Continues To Push Forward

The Egyptian real estate market has been the most fortunate in terms of recovery from the repercussions of the coronavirus outbreak since the beginning of 2020. This may be due to several economic decisions taken by the Egyptian government and the Central Bank of Egypt (CBE) to support this sector. The sector contributes about 20% of the country’s GDP.

Despite the challenges of the COVID-19 pandemic, Egypt’s real estate sector has grown by 8% since the beginning of 2022. The government has issued some key decisions that will change the entire market in the new year and launch a mortgage finance initiative with an interest rate of 3% and installments of up to 30 years.

In this regard, Invest-Gate talks to Tarek Hegazy, CEO and Creative Director of Living Design, who enjoys a 33 year- long portfolio of 350 plus prestigious projects, the majority being five stars hotels. During the interview, Hegazy outlined how RED Summit is elevating the Egyptian real estate market and his evaluation of Egypt’s economy from a global perspective. He also explains the mortgage incentives and how they affected the market, and whether the recent devaluation of the currency would encourage the market or not.

What is the concept that RED would provide for the market? 

RED is not providing a new concept; it is actually the concept of mixing panel discussions and one-to-one meetings, bringing suppliers and key decision-makers in the industry with all the updates on a professional level. They are bringing it to Egypt, and luckily, they managed to get international suppliers and heavyweight decision-makers so that everybody can profit. There is a great mix of products, suppliers, buyers, architects, engineers, investors, and real estate developers. The aim here is to bring and blend them all together. You don’t need to do business one-to-one directly, but we get to know the people, products, and maybe later do business. This summit format, which is a very well-known and intense on two days, is to benefit both sides. Suppliers obviously are the ones fueling these events, and developers got to know them directly and profit from such. It is just mutual interest, and it fuses back to the development of that market.

How would RED Summit elevate the real estate market in Egypt? 

We are having good competition between developers. Too much competition is perfect for the market because it opens our review and allows us to understand precisely what the market wants. It narrows your mistakes and gives you direct contact with suppliers, in addition to understanding the services and asking questions. Having such an event is profitable on both sides.

How do you evaluate Egypt’s economy from a global perspective and the direction it is taking in achieving that? 

First of all, we know that the Egyptian economy is heading in the right direction. It is factually the only market in the Middle East achieving a positive GDP during the pandemic. In terms of real estate and hospitality, we see all statistics running in positive territories, and rates are coming back. The government is managing the business in the right way, obviously.

Additionally, we believe the future path with new cities and re-urbanizing new dwellings would surely reshape a new map of the country. This is especially true when you try to follow the new road network that will surely help the expected future growth.

How do you assess the investment climate of Egypt following the many incentives of the past five years? What is the government still lagging behind? 

These incentives are not enough, as they are happening locally. When reviewing numbers, I do not see foreign investment coming into Egypt in mass with enough potential. I’m surely not talking about sovereign funds investment vehicles, but rather the medium investors. We are not supporting foreign investments enough or offering them enough transparency so they can lay down long seeds. Egypt is witnessing stability, but we have the uncertainty of long-term decisions, which, in turn, make investors skeptical of injecting investments. In addition, we are not laying down a plan telling investor about the government’s long-term plans. We have short-term plans and we have enough of those. We want long-term investments, industries, and real estate, as we are a consumer market. While it is happening, we would like to see a higher pace, more faith, and true facts laying that stabilize our future path.

What does the government need to modify or change to secure the foreign real estate investor or homebuyer? 

Lack of transparency tops the list. So, we need first to stabilize the local market, which is a goal we haven’t reached yet. We are about to reach it over the coming two or three years. Once you have a good base, you can build on it. Now, we have liberalized the foreign currencies, especially the US Dollar, which is a great step forward. There is a war running in Europe, which will have consequences on the whole world, including Egypt. Indeed, I feel that Egypt is working hard on minimizing the side/ negative effects of such setbacks, whether it’s about problems with the supply chain, increasing prices, commodities, food supply; the list is long and getting longer by the day, but we see actions, anticipation and great planning from the leader and government and that’s appreciated.

The government’s initiative brings back stability and the pace of completing all the infrastructure projects paves the way for capital investors. Furthermore, we need to liberalize the private sector even more. Egypt’s economy will develop with the growth of the private sector. We also need to give more planned steps ahead and follow them closely, so we bring stability to the market.

Is devaluation of currency enough to encourage foreign investors and foreign homebuyers? 

It is definitely the right step. The liberalization of the currency alone is not enough. I am for liberalizing the prices of all base services and commodities such as gas, gasoline, and electricity. The government is doing a great job launching the latest mortgage initiative for middle and low-income citizens. That’s how to balance the economy. On the other hand, we still need more sustainability in renewable energy, sustainable consumption, managing wastage, net carbon zero initiative, conserving our natural resources from water and power…. Still, a lot to be done in this sector.

Do you see the idea of exporting real estate moving forward? And what do you see are its main challenges? 

The Egyptian market is a consuming market. I see that Egyptians living abroad are buying second homes in Egypt. The government is very safe about this part because it knows that everybody is barging in back home. We are not exporting enough; we are more consumers due to the high population.

What advice do you give to foreign and local homebuyers? 

Regarding foreign homebuyers, I think we already have our natural resources, services, and quality of people, in addition to the relatively low cost of living, compared to other European destinations. All these features attract foreign home buyers. As for local home buyers, we do have a variety of projects with different price tags, different goals, and meeting all the needs of homebuyers. I think they must be selective, as they need to look at facility management, maintenance, and community. It is like carefully answering the stage following buying the property so they can safeguard their investment.



Welcome! Login in to your account

Remember me Lost your password?

Don't have account. Register

Lost Password