المهندس محمد الجزار يكشف سر أرتفاع أسعار العقارات في الفترة الحالية 💰🏢

Quick Overview

Real estate prices in Egypt, particularly in coastal areas, have seen sudden and significant increases due to high inflation and a sharp rise in the dollar exchange rate, which caused substantial losses for developers. Developers compensated for these losses by raising property prices, a move also supported by the increased purchasing power of higher-income clients and soaring land costs. While the extreme 100-300% price hikes are unlikely to recur, real estate prices are expected to continue their upward trend at a normal investment-driven rate of 15-25% annually, as a decrease is not anticipated in the Egyptian real estate market.

Key Points: Real estate prices in Egypt have seen sudden increases due to high inflation and a significant rise in the dollar exchange rate. The dollar exchange rate reached 70-72 EGP, causing substantial losses for developers who had sold projects but faced increased construction costs. Developers raised prices to compensate for these losses and account for future economic risks. The purchasing power of higher-income clients has also increased, allowing them to afford more expensive properties. Land prices have multiplied, making it impossible to sell properties at previous rates. The extreme 100-300% price increases seen recently are not expected to recur. Real estate prices will continue to rise at a normal investment-driven rate of 15-25% annually, with no anticipated decrease in the Egyptian market.

Context: The discussion centers on the recent surge in real estate prices in Egypt, particularly in coastal areas. This phenomenon is examined within the broader context of significant economic inflation and a sharp depreciation of the Egyptian pound against the US dollar, which has impacted various sectors, including construction and real estate development.

Detailed Analysis

Engineer Mohamed El-Gazzar, Head of Sales Sector for Al-Ashraf Company, explains that the sudden and substantial increase in real estate prices, especially in coastal regions, is primarily driven by economic factors. Egypt experienced a period of significant inflation, coupled with a dramatic rise in the dollar exchange rate, reaching 70-72 EGP. This economic shift resulted in considerable losses for many real estate developers who had pre-sold units but faced escalating construction material costs. To offset these losses and ensure project completion, developers were compelled to raise property prices. El-Gazzar clarifies that this is not solely at the client's expense, as the overall cost of living and the purchasing power of the target clientele have also increased; for instance, clients who previously could afford a 2-3 million EGP property might now earn enough to purchase an 8-9 million EGP property. Furthermore, the initial cost of land has multiplied, making it impossible for developers to maintain older pricing structures. While the extreme 100-300% price increases witnessed recently are not expected to repeat, El-Gazzar asserts that real estate prices in Egypt will continue to rise. He predicts a more stable, investment-driven annual increase of 15-25%, which he considers the natural progression for both investment and inflation. He firmly states that a decrease in real estate prices is not part of the Egyptian real estate lexicon.