Egypt Market Watch Q2 2024 report

The Egypt Market Watch Q2 2024 report provides an analysis of the economic and real estate market conditions in Egypt, covering key trends and future prospects. Here are the main points:

1. Economic Overview

• Impact of Global Events: Egypt’s economy faces challenges due to inflationary pressures from the Russia-Ukraine war and Houthi attacks on ships in the Red Sea, which reduced Suez Canal traffic by 60%.
• GDP Growth: In Q1 2024, Egypt's GDP grew by 2.22%, but growth is expected to be weak in the near term due to high inflation and tight credit conditions. Forecasts suggest a growth of 2.4% in 2024, improving to 5.5% annually between 2025-2028.
• Monetary Policy: The Central Bank raised interest rates to 27.25% to combat inflation. Although inflation is slowing slightly, it remains a key issue for the economy.

2. Real Estate Market

• Real Estate Growth: The real estate and construction sectors saw growth of 3.75% and 5.47% respectively in Q1 2024. A major development deal with Abu Dhabi’s ADQ for the Ras el-Hekma Mediterranean resort is expected to drive substantial foreign investment.
• Ongoing Projects: By Q2 2024, 654 residential and mixed-use projects were underway, valued at $307 billion, with the private sector leading 87.3% of these projects. Cairo, Giza, and Matruh are the top areas for ongoing investments.
• Government vs Private Sector: Government projects tend to be larger in scale, though fewer in number compared to private sector projects. The New Administrative Capital (NAC) is a major focus area for large government investments.

3. Market Trends

• Housing Prices: Apartment sales prices increased dramatically by 70% in Q2 2024 compared to Q2 2023. Popular areas like New Cairo City and Sheikh Zayed City saw price surges of over 100% for apartments of various sizes.
• Rental Market: Rental prices also rose sharply, with apartment rents increasing by 66%. The most popular areas for renters were 6th of October City, New Cairo, and Sheikh Zayed City.
• Villas: The demand for villas also increased, with prices rising by 75% on average. Shorouk City and New Cairo saw significant increases in villa prices, with Return on Capital Gains (ROCG) reaching up to 167%.

4. Future Prospects

• There are expectations for the completion of 14 projects in Q3 2024, with a significant number of projects (61) anticipated for Q4. The NAC continues to be a central focus, with ongoing progress on several large-scale developments.
• Inflation and Exchange Rate: High inflation and currency devaluation are expected to continue influencing both construction costs and real estate prices, making property a preferred investment to hedge against inflation.

Overall, Egypt's real estate market remains a strong investment avenue, driven by both private and government projects despite the macroeconomic challenges.

Read the full article on Propertyfinder's blog here: https://www.propertyfinder.eg/blog/en/market-watch-q2-2024-egypt/