The Egyptian economy has seen better days; after contending with years of political unrest, covid, and finally the War in Ukraine and its adverse effects on an already vulnerable world economy there was another ~15% decrease in the EGP’s strength against the US Dollar in 2022 and of course the global wave of inflation .
There are several implications of that devaluation for that vital sector and those who work in it:
Construction:
The price of raw building material in Egypt went up significantly over the years and with difficulties in importing what we don’t produce locally, the increased expenses on builders and developers had inadvertently led to unit price tags going up.
Home Buyers:
This aspect of the issue differs greatly if you’re rich or at least liquid Vs being of lower economic means. For the wealthier people purchasing real estate was always a guaranteed way of preserving money by buying land and buildings which tend to only go up in price securing their investment. This makes the sector a great opportunity for Egyptians living abroad as their hard currency would make the buying options cheaper.
However, that means that people are buying properties that are already expensive, hence indirectly driving prices up to the detriment of poorer customers looking to buy a home. Coupled with inflation this situation creates more difficulties for the average person as the domino effect of pricier apartments and villas could lead to a stagnation of the sector after those with better financial means are done buying and consolidating their wealth.
In conclusion the impact of the devolution has negatively affected the industry but the fact remains that the demand for real estate in Egypt remains high giving developers and contractors a lifeline amid the generally negative world economic conditions. Other developments in the coming months and their implications remain to be seen as an air of uncertainty is the new normal…
