News Analysis: Egypt's real-estate sector resilient though impacted by COVID-19

Source: Xinhua| 2020-05-29 21:58:41|Editor: huaxia

by Marwa Yahya

CAIRO, May 29 (Xinhua) -- As the Egyptian economy suffers a slowdown due to the outbreak of COVID-19, the real-estate sector stayed resilient to the market fluctuations, according to economic and property experts.

"No country in the world will emerge from the COVID-19 pandemic unscathed especially at the economic level," said Waleed Gaballah, professor of financial and economic jurisdictions at Cairo University.

"Egypt's economy was hit by contraction of tourism, a decline of remittances of Egyptians abroad and unsurprisingly reduction in revenues from the Suez Canal, which is extremely sensitive to global trade and economic growth," Gaballah told Xinhua.

However, in a country of over 100 million people, the demand for housing continues to outstrip supply. The expert added that people always look upon the real-estate sector as "the most secured investment."

In 2019, some 500,000 Egyptians sought to buy apartments whether for living in or investing, according to the country's official statistics agency.

"Sales of properties have been impacted in March and April which usually constitute high sales months in Egypt after the cancellation of Cityscape, the largest real-estate event in Egypt," said Saad Husseiny, sales manager at Property Consultancy, a leading real estate company.

The curfew and the stop of contracts of some employees especially in the tourism and aviation sectors in the wake of the virus made clients reluctant for concluding some deals.

But Husseiny believed that it's "merely a matter of delay of the purchase process" for a certain short period rather than real losses.

"Egypt's real-estate sector is strong and flexible," he added, expecting the second half of 2020 will compensate the losses of the previous months and bring the annual revenues to normal level by the end.

He noted that the country's big developers have offered discounts on some units and expanded the terms of installments to encourage more sales.

Unlike other sectors, the construction sector in Egypt resumed 100 percent of on-site operation at the beginning of April, nearly two weeks after the government initially imposed a curfew in the middle of March to control the spread of the COVID-19.

As part of measures undertaken to stimulate the market, the Central Bank of Egypt (CBE) in March reduced interest rates by 300 basis points, its biggest rate cut on record, setting the lending rate at 10.25 percent.

Gaballah stressed the CBE's move has helped businesses to withstand pressures during the pandemic and experience cheaper debt.

Workers have returned to the country's construction sites while the sanitation measures are fully implemented to preserve their health, according to an agreement between the minister of housing and the Egyptian Federation for Construction and Building Contractors under the supervision of the prime minister.

Moreover, the government has embarked on an ambitious urban-expansion plan spearheaded by the New Administrative Capital east of Cairo in addition to further expansions in different provinces and regions of the country.

Chinese construction giant, the China State Construction Engineering Corporation is continuing to push ahead the project there. At the CBD site, Egyptian and Chinese engineers and workers are sparing no effort to advance construction, while actively implementing pandemic prevention measures.

"The state and private developers pushed the construction works ahead actively in the sites along with implementing the anti-coronavirus precautionary measures to maintain the power of that vital sector," Husseiny explained.

He added the country's developers are exerting tremendous efforts to deliver units on time and gain the confidence of customers. Enditem