The Central Bank of Egypt is meeting tomorrow to decide the immediate future of interest rates, but for the real estate sector, the signal has already been sent. After a peak tightening cycle in 2024, the market is now in a sustained easing period. With 725 bps of rate cuts having already taken place in 2025, the industry is thinking hard about how cheaper loans will fundamentally change the way property is sold, financed, and held in Egypt.

The most immediate impact of the rate-cutting cycle has been the cost of debt. For years, the mortgage market in Egypt has been effectively paralyzed by corridor rates that made traditional borrowing a non-starter for most households. But “when interest rates drop, bank loans become cheaper,” Uptown 6 October CEO Moataz Sharawy explained to EnterpriseAM, which means “those who were waiting or unable to buy due to high installments will now find it easier and more affordable.”

Cheaper financing turns “deferred demand to actual demand,” Housing and Development Properties Vice Chairman Amjad Hassanein tells us. When rates drop, the total interest burden over a 10- or 15-year tenor shrinks significantly, meaning that “every 1% cut in interest is followed by a tangible expansion in the base of customers eligible for long-term loans,” he added. The impact of interest rates is sizable, with Hassanien describing them as “the biggest driver of purchasing power in the real estate market.”

Real estate to replace CDs as the investment vehicle of choice

For the past two years, the Egyptian real estate market acted as a defensive hedge against currency volatility. But now, as interest rates on bank certificates of deposit (CDs) have dropped from 25%+ toward the mid-teens, tns of EGP in maturing certificates are looking for a new home — excuse the pun.

“When bank interest on certificates and deposits drops, people look for something else to put their money in that brings a better return” — and the obvious choice is real estate, Sharawy tells us. Sharawy pointed to real estate not only as a store of value that protects against inflation but also as an asset that can generate a fixed return in the form of rent.

“Lower interest rates do more than just lower the cost of a loan — they signal a shift,” Misr Italia Properties CEO and Managing Director Mohamed Khaled Al Assal tells EnterpriseAM. As bank yields decline, the total return on property — the combination of rental yield and capital appreciation — is starting to outperform fixed-income instruments for the first time since the 2024 devaluation. Hassanien tells us his company expects this will lead to “a major migration wave of liquidity toward the real estate sector.”

The start of a proper mortgage industry?

Perhaps the most significant shift for 2026 is the re-entry of the banking sector into the primary residential market. Historically, Egyptian developers were forced to act as banks, carrying eight- to 10-year installment plans on their own balance sheets because mortgage rates were prohibitive. “This was a necessity, not a choice,” Al Assal tells us.

As rates normalize toward the mid-teens, the burden of financing is shifting back to formal mortgage products. “We are seeing banks introduce step-up mortgages and longer tenors,” Al Assal tells us. This allows developers to de-risk their balance sheets and recycle liquidity into construction speed rather than long-term credit management.

The move also aligns with the state’s push to “expand the ownership base and enhance the role of mortgages as a primary tool for activating the market,“ Mountain View Founder and Executive Chairman Amr Soliman tells us. Faster completions, stalled-project restarts, and increased competition

Lower rates don’t just help buyers — they stabilize the supply chain. “When interest rates drop, the cost of the loan for [developers] decreases, which gives them more money to work with, complete projects faster, and launch new ones,” Sharawy explained. Soliman similarly pointed to how a “lower-cost financing environment contributes to raising the efficiency of the sector and increasing developers’ ability to develop new projects, with a direct impact on the quality and speed of execution.” For the buyer, this means the gap between the first installment and the key-handover should, in theory, begin to shrink.

The high-rate era left a trail of stalled projects — developments that were no longer feasible because their financing models collapsed under 25%+ interest. But as rates get lower, “project owners will be able to take new loans with better terms and complete the work that was stopped,” Sharawy tells us. The restarting of projects will also be helped by “government-backed solutions addressing land fee disputes and execution delays,” Al Assal said.

A lower cost of entry also invites competition. The market in 2024 saw a “consolidation toward quality,” Al Assal tells us, where only the most well-capitalized players survived. As financing becomes more accessible, “competition will increase, which means more options and better quality for the buyer,” Sharawy said. But while this increases options for buyers, it also places a premium on due diligence — as the market expands, the gap between institutional-grade developers and speculative players will widen.

The return of the middle classes to the market

While the luxury segment captures the headlines, the real shift is happening in the middle- and upper-middle-income bracket. “The people who will benefit most are middle-income earners,” Sharawy tells us, explaining that “any reduction in the monthly installment makes a huge difference for them and helps them make the purchasing decision.”

The impact has already been observed, with Al Assal telling EnterpriseAM that “we are seeing a resurgence in the middle-income segment of young professionals and growing families who view the current rate environment as a window before the next cycle of price appreciation.”

Talk of an incoming fall in property prices may be just that — talk

Expectations of a price crash are misplaced. In 2023 and 2024, price spikes of 30-40% were defensive reactions to currency volatility, the developers we spoke to told us. In 2026, we are entering a phase of price rationalization. While prices will continue to rise, the growth will be more natural and healthy, driven by actual demand for housing rather than speculation, we were told.

“In the short term, we may not witness a direct decrease in unit prices due to building material cost pressures, but the rate cut will act as a brake on violent price increases,” Hassanien said. Soliman similarly told us how lower rates and more favorable financing help the “market absorb current prices more smoothly and create a more stable pricing environment without the need for sharp increases or pricing pressure resulting from high financing costs.”

Putting a lid on major price decreases is the fact that “the pricing of real estate units is determined by a wide range of variables, including construction cost, currency price, construction cycle, and the nature of demand, and not by interest alone,” Soliman said.

Lower interest rates also flip the rent vs. buy calculation. “When ownership becomes easier and cheaper, many people who were renting will prefer to buy and own,” Sharawy tells us. As ownership becomes cheaper via more affordable financing, we may even see a slight cooling in the rental market for middle-income housing as tenants transition into owners, he added.

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