Devaluation of Egyptian Pound against the Dollar

How will it affect the Real Estate Market in Egypt?

April, 2022

    /BLOG/Discover Real Estate

Egypt is currently going through a serious crisis, which is the devaluation of the Egyptian pound against the dollar as a result of the Russia-Ukraine war. Undoubtedly, this crisis has a great effect on the Egyptian economy, as the prices of food, gold, petroleum, and many other things have increased. Many people may wonder whether this situation will continue as is or will it improve soon. Investors are also wondering whether it’s the right time to invest in real estate in Egypt, We’ve conducted an interview with RE/MAX Real Estate experts to find out the status of real estate investment during this crisis; Mrs. Heba Osman, Broker Owner of RE/MAX Everest, Mr. Mohamed Degheady, Broker Owner of RE/MAX ALMohager in New Cairo and Sheikh Zayed, Mr. Hany Sobhy, Broker Owner of RE/MAX Capital Properties, Mr. Ahmed Mohsen, Broker Owner of RE/MAX Concept, and Dr. Hady Fathy, Head of Valuation and Feasibility Study Department at RE/MAX Corporate

The impact of the Devaluation on the Real Estate Market

Mrs. Osman and Mr. Degheady agreed that the real estate market had gone through many crises in 2008, 2011, 2013, and 2016, but it overcame all these crises. They gave attention to the crisis that occurred in 2016 when the Egyptian pound was devaluated and the price of the dollar was doubled. They explained that during that time the real estate market overcame this crisis, in fact, there was an increase in the number of serious buyers who started buying properties as they found out that it was the right time to invest in the real estate. As a result, the real estate market achieved the highest number of transactions that year. For that reason they expect that the real estate market will also overcome this crisis. In response to the question about whether it’s the right time to invest or not, they suggested that now is the perfect time because property prices will never decrease in the future rather they will always increase.

Mr. Sobhy stated that real estate is a store of value. Whenever there are changes in the currency’s value, people always prefer to invest their money in real estate as it is the safest long-term investment in Egypt. If you decide to buy a property at this time, you will reap its benefit within one or two years as it would have doubled in price.

He added that now is the right time to export real estate and is a great opportunity for Egyptians living abroad and foreigners to invest in real estate in Egypt as the dollar value increases, foreigners will be able to buy properties at a lower price. This will benefit the Egyptian economy in general and the real estate market in particular.

villas interfaces

How will this crisis affect developers in Egypt?

According to Dr. Fathy, real estate developers in Egypt have already been greatly affected by this crisis due to the rise in prices of raw materials such as cement and iron and their shortage in the Egyptian market. They are facing a great challenge at the time; some of them will be able to complete their project, bear the costs, and deliver their projects on time with the quality agreed upon, while others might have to stop the completion of their project. Mr. Sobhy supports this point of view, explaining that the top real estate developers who are aware of changes that happened in the real estate market over the past years are the ones who will be able to overcome this crisis. This is why he highly recommends that buyers should reach out to a property consultant to direct them to the best developers in the real estate market.

New Administrative Capital... Is it still the area of interest to investors?

Mrs. Osman and Mr. Degheady agreed that the New Administrative Capital is still an attractive area for many Egyptian and foreign investors despite the devaluation of the Egyptian pound. They added that new areas such as the New Administrative Capital, New Alamein City, and Al Galala are still a good opportunity for investment at this time as they are guaranteed to achieve the highest ROI. In addition, Mr. Sobhy advises investors to invest in the New Administrative Capital before its inauguration on 30/6/2022 as property prices will increase significantly later.

Moreover, Mr. Mohsen said that commercial projects are the best investment in the New Administrative Capital, followed by administrative and residential areas as the commercial and administrative investments usually achieve the highest ROI and the investor can also rent these properties to increase their income.

He also assured investors in the New Administrative Capital that the current situation will not affect the delivery date of their units as the government supervises this process and takes strict actions against developers who do not deliver units on time, so there is no need to worry!


The Role of the government in supporting the Real Estate Sector

Mr. Sobhy stated that the government has already encouraged Egyptian and foreign investors thanks to its new investment law that allows foreigners to own properties in Egypt without limits. This is considered a great opportunity for foreigners to invest in Egypt. He added that the government has also facilitated the accessibility to areas that most investors like to invest in, such as the New Administrative Capital, Al Galala, and New Alamein City.

In addition, Mrs. Osman stressed on the importance of supporting developers financially during this crisis so that they can deliver their projects on time. She also stressed the role of banks in providing financial facilities to developers and investors.

The Role of Mortgage Finance in boosting the Real Estate Market

A Mortgage is a loan given by a bank or any credit institution to investors with the aim of buying a property and then repaying the loan in installments. A mortgage doesn’t only help buyers but also developers who are in need of a loan to complete their projects.

Mrs. Osman believes that Mortgage Finance is one of the most important financial decisions taken by the government to encourage real estate investment in Egypt. It helps in boosting the movement of real estate investment at this time, as buyers who do not have cash can buy a property and live in it immediately and pay off its cost in installments to the lending institution. Sellers are also able to take the full amount and invest it in another property.

Mr. Sobhy and Dr. Fathy supported this point of view, explaining that Mortgage Finance facilitates owning units instead of renting them. It helps the real estate market in general as well as buyers, sellers, and the banking sector in particular. For that reason, the government should facilitate the administrative process, insurance fees, and procedures so that the process is smoother.

new administrative Capital

Finally, we would like to emphasize that the state, officials, and developers are doing their best to overcome the crisis of the devaluation and its impact on the real estate market. We encourage investors to start investing in real estate as now is the right time. If you need any real estate consultations about the best properties and developers in Egypt, you can contact our real estate experts at RE/MAX Egypt by calling 16088.

Mrs. Heba Osman

Broker Owner

Mr. Mohamed Degheady

Broker Owner

Mr. Hany Sobhy

Broker Owner

Mr. Ahmed Mohsen

Broker Owner

RE/MAX Concept

Dr. Hady Fathy

Head of Valuation and Feasibility Study Department

RE/MAX Corporate