Housing affordability has become one of hottest topics in real estate internationally. Economic and market analysts attribute the phenomenon to multiple factors including generational changes, demographics, costs of construction and development, and a changing investment environment.
In Egypt, housing affordability has continued to raise questions and concerns regarding a market bubble and whether prices are sustainable. The answer according to most economic analysts and real estate market experts remains that prices in Egypt have been constantly increasing as a result of two main factors only.
First, the cost of construction and development has increased with no foreseeable capping to those increases. Yet developers strive to offer extended payment plans in order to balance the affordability problem, pushing them to assume larger financial risk and capping interests at their expense.
Second, the investment environment in Egypt has shifted with real estate becoming the crown jewel of investment in the last two years due to its increasing appreciation and preserving its value throughout political and economic instability. Therefore, price increases have been a direct cause of an increase in pure demand and the costs of construction and development.
As for the housing affordability problem, Egypt’s real estate developers have offered a significantly effective solution through extending their payment plans while capping their interest rates, which compared to international markets is rare for developers to assume such financial risk to support a healthy market environment, which has also been a reason for increased foreign investment into the real estate sector in Egypt.
If you’re interested to know more about the Egyptian Real Estate market, contact our R&D experts at B2B to understand our full scope of services and how we can help.