A transformative yet challenging year ahead: The real estate sector is bracing for a monumental year marked by significant promise, but also hurdles. While the market is set to witness robust activity — with expansive real estate projects and broader urban development fueled by years of infrastructure expansion — rising construction costs, dependence on imported inputs, and uncertainty surrounding interest rates will influence pricing strategies and market dynamics. These factors are likely to persist through 2025 and 2026, shaping the sector’s trajectory.

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Consumer preferences are shifting: Demand patterns in the real estate market are undergoing significant changes. With increased investment inflows and surplus liquidity, alongside efforts to export real estate and launch platforms to manage a massive portfolio of state-owned and developer-built finished units, the sector is poised for a shakeup. These shifts are expected to push real estate sales beyond the EGP 1 tn mark next year, industry insiders told EnterpriseAM.

Real estate remains a safe bet for 2025: Beta Egypt Chairman Alaa Fikry told EnterpriseAM that expectations of lower interest rates, coupled with ongoing volatility in gold and USD prices, will likely drive more Egyptians to invest in real estate. He highlighted that real estate is no longer viewed solely as an investment vehicle, but also as a secure way to preserve savings, often appreciating in line with or above inflation.

Challenges for investors amid uncertainty: High interest rates — which can reach as much as 33% for the sector — and reliance on imported production inputs continue to challenge investors, Fikry said. Addressing these issues requires careful planning and expertise, he added, noting that some 200 SME developers have struggled recently due to poor planning, mispricing, and insufficient risk management.

Prices set to rise further: Real estate prices could rise by as much as 30% this year, driven by inflation, rising production costs, and high interest rates, Mohamed El Bustani, the deputy head of the Federation of Egyptian Chambers of Commerce’s real estate division, told EnterpriseAM. Fikry echoed the sentiment, noting that pricing remains tricky due to uncertainty surrounding the global USD outlook and Egypt’s exposure to regional tensions. He added, that prices are unlikely to fall any time soon.

Government support remains key: Real estate developers continue to benefit from strong government support, head of the Federation of Egyptian Industries’ (FEI) real estate division, Osama Saad El Din, told EnterpriseAM. The government’s responsiveness to developers’ demands and efforts to resolve challenges reaffirm its commitment to the sector as a growth engine and investment magnet. Saad El Din added that while mega-projects will persist, private sector developers are expected to take the lead in driving foreign and local investments to advance Egypt’s urban development agenda.

Coastal properties are in high demand: Tourism and coastal real estate are becoming major investment targets, offering returns that far surpass those of traditional bank CDs. Bustani highlighted strong demand for properties in the North Coast, Red Sea, and premium areas in Cairo.

Catering to Egyptians abroad: Egyptians living abroad, along with Arab and foreign investors, now make up 50% of real estate demand, according to Fikry. Local buyers account for the remaining half. Developers are increasingly targeting Egyptians abroad, leveraging favorable exchange rates to drive sales and boost liquidity.

Risk management takes center stage: Developers are adopting more specialized pricing strategies and phasing project sales to mitigate risks, Saad El Din and Fikry told us. Many developers are reserving inventory for later phases of construction to offset early-stage sales losses. Fikry also highlighted a trend of shortening installment periods to maintain steady cash flow throughout project timelines.

A pivot towards hotel construction: Major developers are focusing on hotel construction to cater to Egypt’s growing tourism industry. From historical sites to coastal destinations, Egypt’s appeal as a tourist hub — bolstered by favorable exchange rates and strategic location — makes the sector a prime target for expansion. Saad El Din expects the coming year to see more hotel projects rolled out by developers.

Contractors eye regional expansion: Contractors are increasingly partnering with developers under co-development agreements to complete infrastructure and utilities projects. They’re also looking to expand regionally, with Iraq, Libya, and Saudi Arabia among the top markets, Egyptian Federation for Construction and Building Contractors head Mohamed Sami Saad told EnterpriseAM.

Government spending to remain capped: The government plans to keep public investment spending tight in the coming fiscal year, according to a government source who spoke to EnterpriseAM. Ministries have been instructed not to exceed their current fiscal year budgets for investment projects, with total allocations capped at EGP 1 tn.

Your top infrastructure stories for the week:

  • The Suez Canal Authority successfully tested a new 10 km lane in its southern section, raising the canal’s two-way length to 82 km. The extension boosts capacity by 6-8 vessels daily and improves navigational safety, according to SCA head Osama Rabie. (Statement)
  • Egypt’s Arish Port receives its first ever breakbulk shipment, which included five wind turbines and their accessories for use at a wind power plant in North Sinai. (Statement)
  • Government greenlights ACWA Power and Hassan Allam Utilities to establish their 1.1 GW wind farm in the Gulf of Suez, a government source told EnterpriseAM. The first of the project’s two phases will see the firms establish 550 MW worth of capacity in Ras Shukeir, with the second phases set to see an additional 550 MW installed in Ras Ghareb.
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