North Coast developers are changing the product as the market shifts

The Sahel product is changing with the market: Smaller units, longer payment plans, better finishing, faster delivery, and more amenities are reshaping the North Coast product as developers adapt to tighter affordability and a market where flipping is harder. After several years of rapid price increases, developers are increasingly changing what they sell and how they sell it to sustain demand.

Prices are still climbing: North Coast property prices rose around 15-20% between 2025 and 2026, compared with around 3-5% in Cairo, Mohamed Salah, real estate consultant and CEO of Arena Assets Real Estate, told EnterpriseAM. Knight Frank’s numbers point to an even stronger increase, with asking prices on new inventory and newly launched phases up around 24% so far this year compared with last season, Aliaa Elesaaki, Senior Research Manager for the UAE and Egypt at Knight Frank MENA, told EnterpriseAM.

Developers are facing their own cost pressures: Construction costs per sqm across Al Ahly Sabbour’s North Coast projects increased around 20-25% over the past 12 months amid higher costs for building materials, contracting, energy, transportation, and supply chains, Ahmed Sabbour, chairman of Al Ahly Sabbour, told EnterpriseAM. The challenge is absorbing those increases “without compromising the quality of the product,” Sabbour said.

The squeeze is changing the product: Developers face rising construction costs on one side and buyers increasingly sensitive to affordability on the other. Their response is showing up in unit sizes, payment plans, construction schedules, finishing standards, and the services offered within projects.

Smaller units are bringing down ticket prices, not necessarily price per sqm: A two-bedroom unit that might previously have been 110 sqm could now be offered at around 95 sqm, Salah said. In his example, a developer could bring the total price down from EGP 20 mn to EGP 16 mn without actually making the underlying sqm cheaper. “The price per sqm hasn’t actually gone down. I’ve just reduced the area,” he said.

Smaller units are also taking a bigger share of new projects: Studios and one-bedroom units can now account for around 30-40% of inventory when developers segment new North Coast projects, Elesaaki said. “The lower the ticket price, the easier the sale is,” she added. For Egyptian buyers in particular, the total unit price and quarterly installment can matter more than the price per sqm.

Payment plans are stretching again: Average payment periods across North Coast developments tracked by Knight Frank have reached around 7.8 years, up from approximately 4.5 years in 2023-2024 and five to six years last year. “The first thing they do to address price increases is stretch the payment plan so they can address more than one segment of the population,” Elesaaki said.

And some plans now exceed ten years: Payment periods have surpassed a decade in some cases, JLL Egypt General Manager Ayman Samy told EnterpriseAM. But Samy does not see that as evidence of outright price cuts in the primary market. “I don’t see prices coming down in the primary market,” he said. Instead, developers are offering different prices depending on payment terms, with substantial discounts available to buyers willing to pay over shorter periods.

Longer plans create a problem for developers, too: Developers still need to finance construction while collecting more of their sales proceeds further into the future. Sabbour said the solution is not simply extending payment periods, but having “a financial and operating model capable of matching cash flows with construction requirements.” Al Ahly Sabbour is also diversifying its funding sources rather than relying solely on sales proceeds.

Different buyers increasingly require different products: Egyptian buyers tend to favor lower ticket prices, while GCC buyers show greater interest in larger units for personal use, including two- and three-bedroom apartments and penthouses, Elesaaki said. Developers are also increasingly targeting GCC nationals and Egyptians abroad through regional property exhibitions in markets including Saudi Arabia and Qatar.

The flipping era is fading: “Flipping has declined significantly,” Salah said, with investors now potentially needing to hold a property for around three years before realizing a meaningful resale return. Samy similarly describes property as a “long term game,” with a three-to-four-year holding period potentially required.

Buyers appear to be adjusting accordingly: Questions about quick resale and exit strategies have become less common over the past two years, Elesaaki said. “People are looking more at the long term,” with property increasingly viewed as a store of wealth or part of a broader asset portfolio rather than something to flip quickly.

Delivery is becoming part of the product: With buyers becoming more selective, construction progress is increasingly a selling point. Developers need to “be committed to construction,” Salah said.

Competition is pushing quality higher: The arrival of more non-Egyptian, particularly Emirati, developers has given buyers a new benchmark for finishing, specifications, appliances, unit areas, and delivery. “The entry of non-Egyptian developers began raising the standard,” Salah said. That is putting more pressure on local developers to compete on what buyers actually receive rather than price and location alone.

Developers are also selling more than the unit: “The decision to buy property today has become primarily an investment decision,” Sabbour said. That puts greater weight on execution, product quality, services, and community management after delivery as developers seek to preserve the long-term value of their projects.

Master plans are changing with that competition: Some developers are reconsidering the traditional approach of maximizing residential units close to the beachfront, instead allocating more prime space to services, amenities, and attractions that differentiate their projects, Salah said. Others are considering facilities such as medical centers where their master plans allow.

Hospitality is becoming a bigger part of the mix: Hotels, serviced apartments, and branded residences are increasingly finding their way into North Coast developments. The coast still faces a shortage of hotel rooms while leisure and hospitality demand is growing, Samy said. Salah similarly sees branded villas and serviced apartments becoming more common as developers look beyond seasonal second homes.

Branded residences also offer a different investment proposition: Unlike a second home bought primarily for personal use, branded residences can function as income-generating assets when purchased specifically for rental. “You’re buying it with the purpose of renting it out, not using it,” Elesaaki said.