CAIRO, Oct. 14 (Xinhua) -- The real estate market in Egypt has been witnessing continued growth amid expectations of more investments in the residential sector in the coming years, Egyptian experts said.
The experts attributed the growth to Egyptians' appetite for investment in the real estate market because this sector is relatively safe and the demand is always high in the country with over 100 million people.
According to Egypt's Central Agency for Public Mobilization and Statistics (CAPMAS), some 326,300 units were implemented in 2017/2018 in Egypt with investments of 106.9 billion Egyptian pounds (about 6.57 billion U.S. dollars), compared with 317,200 units in 2016/2017 with investments of 91.8 billion pounds.
In terms of construction type, economic housing came at the first place with 169,800 new units, followed by average housing, above average housing, and luxurious housing units.
According to CAMPAS, 105,100 units were implemented by government and public sectors in 2017/2018 out of the total, up 4.5 percent year on year.
In this regard, Saeed Tawfiq, professor of investment and finance at Ain Shams University, said that the Egyptians' appetite for real estate investment is a normal situation, with real estate prices rising annually.
Tawfiq told Xinhua that Egyptians tend to buy real estate properties instead of buying bonds or depositing their money in banks, adding "investment in real estate is less risky than investment in stock market or bonds."
He pointed out that real estate investment is "the most successful economic sector in Egypt at present," noting that the Egyptian market needs more residential units due to the high population growth as well as income increase.
"Recent government laws on the real estate sector, such as the Real Estate Tax Law and the Reconciliation Law for Building Violations, have not adversely affected real estate investment, but increased the value of real estate in Egypt," the expert said.
Egypt is currently building 20 "fourth-generation cities" on a total area of 243,600 hectares, expected to accommodate about 30 million people in addition to providing millions of jobs.
These new cities are located across the country, while the largest one is the New Administrative Capital, east of the capital Cairo.
The fourth generation cities are integrated cities in terms of availability of services and the use of advanced technologies in infrastructure and facilities.
The Egyptian government believes that these cities will provide a better life, meet rapid population growth, and offer housing facilities and job opportunities. The government also aims to increase the urban area ratio in Egypt from 7 percent to 14 percent by 2050.
All these government plans and projects have made a boom in the real estate sector.
"The geographical location of Egypt, and its improving political stability, economic growth and unemployment rate helped make real estate investment attractive," urban planning and real estate expert, Abdel-Meguid Gadou, told Xinhua.
He explained that there are about 1 million marriages annually in Egypt, "therefore Egypt needs 500,000 housing units annually, but the units implemented are far less."
Gadou added that there is a gap between supply and demand in the average and below average housing sector in Egypt, which constitutes an aspect for investment.
Waleed Gaballah, member of the Egyptian Association for Political Economy, said real estate investment is one of the leading and important sectors for development in Egypt.
"The Egyptian government not only encourages investment in the real estate sector, but also contributes to this market through presenting investment offerings," Gaballah said.
He added that the Egyptian government is attracting the Egyptians expatriates to invest in the real estate sector, especially in new cities.
"Real estate sector is one of the bedrocks of the Egyptian economy and development. The government aims to revitalize this sector with a reduction in profit margin to create a competition between investment in real estate and other sectors," the expert revealed.
