莱坊+2023埃及房地产市场报告-英-22页_34mb

Summary of Destination Egypt 2023 Report

Core Content

This report provides an in-depth analysis of the demand for Egyptian real estate from GCC (Gulf Cooperation Council) investors. It highlights the growing interest in Egypt as a real estate investment destination, particularly in the residential sector, and outlines key trends, investment preferences, and challenges in the market.

Main Points

• Egypt as a Real Estate Destination: Egypt has become a key focus for GCC investments, with sovereign wealth funds investing over $115bn in the country over the last two-and-a-half years. The removal of restrictions on foreign property ownership has increased accessibility and demand.

• Residential Market Dominance: The residential sector is the largest part of Egypt’s real estate market. In 2022, $16bn of real estate investments in Cairo were in the residential sector, with $10% price growth in Cairo and $24% in New Cairo. The market is expected to grow further, with residential sales projected to reach $30bn by 2028.

• Investment Preferences:

  • Location: Greater Cairo is the most preferred location for residential investment, with 73% of GCC buyers targeting it. The North Coast (35%) and Sharm El Sheikh (31%) are also highly sought after.
  • Sector: Branded residences (30%) and retail (29%) are the second and third most preferred sectors, respectively.
  • Investable Wealth: The average net worth of respondents is $0.76 million, with $1.1 million being the average budget for a residential purchase. UAE nationals have the highest average budget at $1.6 million.

• Survey Insights:

  • 72% of GCC nationals buy property in Egypt for a second home / holiday home.
  • 68% of respondents already own at least one property in Egypt, with Emirati (37%) and Saudi (39%) nationals being the most likely to own multiple homes.
  • 60% of respondents are interested in resale properties due to economic challenges.

• Market Trends:

  • Second Homes: The second home market is expected to grow, with $2.1bn in sales in 2022 and a projected 30% increase in 2023.
  • Rental Income: 74% of GCC buyers plan to rent out their second homes, with 85% expecting to mostly rent. Rental yield expectations range from 4% to 8%, with Qataris being the most optimistic.
  • Construction Projects: Over 400,000 homes are under construction in Greater Cairo, and 8,000 on the North Coast, with many expected to be completed by 2028.

• Challenges:

  • Inflation: Egypt’s inflation has reached 36%, making real estate unaffordable for some buyers.
  • Interest Rates: Rising interest rates (up to 19.25%) have shifted demand towards smaller units and completed properties.
  • Economic Uncertainty: Despite these challenges, the market is seen as having a bright future, especially with ongoing investments and government-led development projects.

• Key Developments:

  • New Administrative Capital (NAC): A $59bn project expected to house 6.5 million residents in its first phase, featuring 20 residential districts, 8 sq km Green River Park, and the Grand Egyptian Mosque.
  • Greater Cairo Developments: Projects such as Uptown Cairo, Cairo Festival City, and New Cairo are driving growth.
  • Red Sea Developments: Projects like Makadi Bay and El Gouna are in high demand, with villa prices ranging from $1,450 psm to $3,550 psm.

Key Information

• Investment Growth:
  • UAE led in 2021/22 with $5.7bn in total investment.
  • Saudi Arabia led in 2023 with $2.1bn in total investment.
• Market Forecast:
  • Residential sales in Egypt are expected to grow from $18bn in 2022 to $30bn by 2028.
  • The second home market is expected to grow by 30% in 2023.
• Property Prices:
  • Apartment prices in New Cairo average $450 psm, rising to $690 psm for villas.
  • On the North Coast, apartment prices range from $950 psm to $3,000 psm, and villa prices from $1,450 psm to $3,550 psm.
• Investor Behavior:
  • 83% of GCC nationals are interested in making a residential purchase in Egypt.
  • 94% of those with investable wealth over $1 million are interested in buying, with 56% planning to do so this year.
  • Qataris are the most eager to buy, with 64% interested in a purchase this year.

Conclusion

Egypt's real estate market is experiencing significant growth, driven by GCC investments and the appeal of second homes, especially on the North Coast and Red Sea. Despite challenges like inflation and currency devaluation, the market remains attractive due to its potential for capital appreciation, rental yields, and the government's infrastructure projects. The residential sector continues to dominate, with a focus on completed and resale properties as demand shifts due to economic pressures.