Following a positive start to 2019, most sectors of Cairo’s real estate market remained soft by the end of Q4, with the government currently undertaking extensive strategic plans to stimulate growth and drive investment opportunities.
The report also highlighted how the Central Bank of Egypt’s (CBE) move to consecutively cut key interest rates last year proved positive, as a slow recovery in consumption levels and lower debt interest payments were brought about in response to mitigating imbalances over the year.
“The year 2019 was intriguing on so many levels for Egypt. It will be remembered as a year which saw our country addressing a wide range of changes and challenges right across the real estate sector,” said Ayman Sami, JLL’s Country Head – Egypt office.
“The good news is that after the shock of fuel subsidy reforms wore off, and with price pressures alleviated in recent months, we are expecting domestic demand to strengthen in the forthcoming period.”
Ease of doing business
The report highlights how the Egyptian government is undertaking plans to ease doing business, lure more foreign direct investments, reinforce the role of the private sector through partnerships (PPPs), and enhance the country’s overall investment climate.
Importantly, according to the report, are the efforts that are being undertaken to export Egypt’s real estate abroad, with Egypt participating in MIPIM 2020, regarded as one of the world’s leading real estate market events, for the second time in a row. Egypt will also participate in Dubai Expo 2020 to promote its investment, commercial and service sectors.
“The real estate sector is a main driver of Egyptian economic growth,” said Mr. Sami. “These key initiatives will achieve positive results and will help boost demand in the medium and long-term.”
Egypt 2030 Vision
Egypt’s parliament also approved the FY 2019/20 budget with spending set at EGP 1.6 trn ($96bn), up EGP 150 bn compared to last year, marking the biggest state budget in the country’s history.The new budget will support local development sectors, with an unprecedented uplift to be pumped into the health and education industries as well.
“The government is committed to achieving the goals of Egypt Vision 2030, with a special focus on sustaining urban development, while bolstering the advancement of Upper Egypt,” said Mr. Sami.
Smart cities, new technology and transparency
The JLL report also discusses the concept of ‘smart cities’, particularly given the technological developments that are planned for the country, along with a new batch of fourth-generation cities, many of which will be in the New Administrative Capital (NAC).
Local authorities have vowed to continue working towards improving market transparency and refining the investment climate through the introduction of new technologies and innovative solutions, including e-filing systems, unified smart cards and online property registrations, among more to be announced later this year.
For further details and a market summary on Egypt’s Real Estate Market in 2019, along with insights into the office, residential, retail and hotel sectors, please find the full report here.