Market Trends of Egypt Real Estate Brokerage Industry
Increasing Investments in Real Estate Development
- The residential and mixed-use real estate sectors in Egypt are bustling with a total of 522 projects, collectively valued at USD 309.9 billion (AED 1.1 trillion). These projects dominate the landscape, accounting for over half of all projects, and command a significant 83% of the total investments.
- Spread across 21 governorates, Egypt's real estate ventures are making significant progress, with approximately 52% of them already past the halfway mark in construction. Notably, Cairo leads the pack, securing 59% of residential real estate investments, closely followed by Giza Governorate at 15%.
- Q1 of 2023 saw eight developers kick-starting nine projects across four governorates, with an initial estimated cost of USD 1 billion (AED 3.67 billion). However, these figures are set to soar, with projections indicating a staggering increase to USD 15 billion (AED 55 billion) in the subsequent quarter.
- Naia Development, previously known as Jumeirah Egypt Real Estate Investment, took the lead in Q1, committing USD 370 million (AED 1.4 billion), representing a notable 37% of the total investment. Meanwhile, Times Development was not far behind, aiming for an investment of approximately USD 252 million (AED 926 million). The lion's share of these new developments, around 44%, is concentrated in Cairo, with Giza Governorate trailing at 33%, primarily centered in New Zayed City.
- Q1 of 2023 marked the completion of 17 projects in Egypt, collectively valued at USD 1.304 billion (AED 4.8 billion). This showcases a robust 31% increase in volume and a 32% surge in value compared to the same period in 2022. Cairo, with around 24% of these projects, saw New Cairo emerge as the focal point, hosting 50% of the city's projects and contributing a staggering 92% of their total value.
- Noteworthy achievements in Q1 2023 include Palm Hills Developments (PHD), which solidified its position as a key player by constructing 662 buildings in the Palm Hills-Fera New Cairo project, amounting to USD 640 million (AED 2.35 billion). In addition, Cairo Investment and Real Estate Development (CIRA) invested close to USD 200 million (AED 735 million) in the completed Katameya Dunes Compound in New Cairo.
- Giza Governorate saw the delivery of 18% of the projects, with a cumulative value of USD 108.5 million (AED 399 million). SODIC, a prominent player, wrapped up projects worth USD 44.5 million (AED 163.4 million) in phase two of The Estates compound in Sheikh Zayed City.
- As for the market trends, Q1 of 2023 witnessed a 30% surge in the average asking price for apartments compared to the previous year, while villas saw a 25% increase. Rentals were not far behind, with flats and villas witnessing a 24% uptick. This upward trajectory can be attributed to the depreciation of the Egyptian pound and the prevailing high inflation rates, impacting building costs in the real estate sector.
- For investors, Hay El Maadi emerged as a top choice for one-bedroom apartments, boasting an impressive 9.85% return on investment (ROI). Meanwhile, New Cairo City took the lead for three-bedroom villas, offering a solid 8% ROI.
- The robust growth and substantial investments in Egypt's real estate sector are significantly boosting the real estate custom brokerage market. The increasing number of projects and rising property values create a fertile ground for brokerage firms to thrive, offering specialized services to navigate the complex market dynamics. This surge in activity not only enhances the demand for brokerage services but also drives innovation and competition within the sector, ultimately benefiting consumers and investors alike.
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Increasing Urbanization and Population Growth Driving the Real Estate Brokerage Services
- Urbanization drives population growth in cities, intensifying the need for housing. As urban hubs attract more people in pursuit of better job prospects, education, and amenities, the demand for residential properties surges. Real estate brokers play a pivotal role in facilitating transactions between buyers and sellers.
- With Egypt's urban growth rate currently at 2%, its cities need to accommodate nearly 1 million new residents annually. Projections suggest that by 2041, urban residents will outnumber their rural counterparts, with an estimated 69 million individuals living in urban areas.
- Between 2024 and 2029, Egypt's population is forecasted to grow by 11.2 million, marking a 10.39% increase. This growth trajectory is set to culminate in a population peak of 119 million in 2029, following a decade of consistent increases. It is important to note that Egypt's population has been steadily rising in recent years.
- Urbanization in Egypt is not just boosting demand for residential properties; it is also driving interest in commercial real estate. As urban areas expand, the need for office spaces, retail outlets, industrial facilities, and hospitality venues rises. Commercial real estate brokers are instrumental in helping businesses secure suitable locations and navigate negotiations, be it for leasing or purchasing.
- Urbanization emerges as a key catalyst for Egypt's real estate brokerage market, fueling demand for residential and commercial properties. This trend not only spurs infrastructure development and boosts property values but also diversifies property offerings and fosters economic growth. Brokers who grasp the nuances of urbanization and adeptly navigate the evolving market landscape are poised to leverage the opportunities arising from Egypt's urban growth. This surge in demand for both residential and commercial properties significantly boosts the real estate custom brokerage market, as brokers are increasingly sought after to provide tailored solutions and expert guidance in a rapidly evolving urban environment.
