The announcement by Chinese Developers that they will fund the new Egypt Cairo has ignited and shown a closer move towards reality. The China Fortune Land Development Company announced that they offer $20 billion investment. Another state-owned Chinese company announced that they will invest $15 billion. The new city is developed to reduce pollution, overcrowding, and prices of house in Cairo. The government noted that New Cairo will foster consensus, enhance national spirit, and sustainable growth. This offers investors an opportunity to invest in a project to make sure that people get places where they can work, live, and invest. The challenge that investors and government need to manage is housing units that are expensive, inaccessible, and unattainable for the majority of people.
The increased number of Arab investor in Egypt’s New Cairo is revamping the real estate sector in the country. There is growth in the development of new residential units; thus, effective and profitable investment opportunity. There is increased housing needs for a population that is growing steadily at two percent. The demand for residential houses increased in 2014 after the experience of Arab spring and regime change. The political turmoil didn’t dampen the appetite and need for investors to develop new units for commercial and residential purposes. It can be noted that investment in Egypt real estate extends to other sectors such as hospitality. The mega-projects such as the expansion of the Suez Canal and Cairo Airport City will open up the environment for investment. The factors pushing for real estate demand in the country is an additional need for retail, housing, and social infrastructure.
The huge population of Egyptians provides investors with a large consumer base for housing units. The favorable economic climate, growing middle class, and low cost of labor are enhancing the stature of Cairo as a Real Estate hub in the region. It is imperative to note that Egypt is strategically located on edges of Africa and connects countries in Middle East, Europe, Asia, and Africa. These factors have played a critical role in enhancing the status of Egypt as an investment destination for real estate. Also, it is estimated that there will be a shortage of half a million housing units by 2020. The government has developed initiatives to create a conducive investment environment. They are encouraging efforts of investors in developing housing units for the poor in society. The investors need to invest in low-cost housing units since many developers are focusing on the high-end market. The gap in low-income earner housing units offers an excellent opportunity for investors.
Similarly, the increasing population growth is estimated to increase the housing needs of approximately 100,000 units per year to meet the demand. The demographics of households is changing as many young people prefer living alone. As investors in real estate, the change in demographics will affect consumer demand for houses. The price per meter of rental income is increasing steadily with to about $60. In the last year alone, the real estate prices have achieved a remarkable increase with studies quoting 20 percent increase. The expansion of trade and business activities in Egypt and price saturation promise better returns. The increase overcrowding increased needs of government to develop new cities such as New Cairo, 6th of October and Sheikh Zayed. The increased prices of housing units for rental and residential promises a better return for investors.
Investors in real estate in Egypt underscore opportunities available in New Cairo owing to the increased development of luxurious, middle-class and high-income housing units. Large projects in real estate include the development of villas, malls, commercial and residential units. Moreover, the real estate business has established itself despite the country’s battered economy that is struggling after ousting President Hosni Mubarak. The currency value plunged, the number of tourists reduced significantly after the crushing of the Russian plane. The country has fought notions of political instability and concerns about the shortage of dollars. The economy of Egypt is stronger despite the challenges that the country is facing, which promises better returns for investors.
The demand for housing needs is surpassing the supply of housing units provided; thus, l real estate business will be profitable for any investor. The increased activity in the real-estate business in Egypt is attributable to high growth in population. Many Egyptians locally and abroad attest to fact that the real estate market is thriving and superior investment destination. There is increased local investment in real estate business. An advantage of investing in Egypt includes better returns for investors in an environment that are safer. The devalued currency offers local investors to purchase housing units at a lower price when their currency is weak. Investors need to take advantage of cheaper investment opportunity. The emergence of the middle class in the economy such as Egypt offers investors’ confidence in safe harboring their investment in real estate. There are rising demands and prices of homes in many parts of the world, which shows that the housing boom is not limited to developed nations.
Egyptian real estate company Palm Hills developed and sold 100 residents in the new Cairo for less than 48hrs. The increased market for housing properties in New Cairo offers investors opportunities for investment. Companies such as Emaar Properties have posted increased profits of about twelve percent increase last year. According to the company, Egypt presents an exceptional opportunity for investment. They have increased the number of units with 39 percent in housing units this year, which shows increased investor confidence. The housing units are affordable to consumers, which has increased market uptake. The increased uptake of housing units by population increases appetite for further investment for affordable housing solutions. Consumers are looking for alternative areas for investing, working, and stay and Egypt New Cairo offers an exceptional opportunity for investors.
Investors should secure their money by investing in Egypt as volatility in the currency and inflation is expanding the property market. Arguably, the market bubble seems to be catching up with Egypt as the increase in sales and prices is reaching fever pitch. The country leadership needs to address currency devaluation to make real estate attractive. Investors need to make sure that they develop products that are tailor-made for local markets. The expansion of the retail segment with the establishment of malls, hyper and supermarkets increased the need for rental space. The high market potentials and strong economy of Egypt have motivated investments in the retail sector.
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