Real estate investment in Egypt and the UAE Know the differences

Amal Ali 09 Feb 2023

The real estate sector remains one of the most important and largest markets that continue to attract investors, due to its big advantages over other sectors.

Every investor is looking for the best opportunity and the most successful market in which to put his money. Security is one of the most important factors that facilitate investment decisions.

The Arab region has several successful real estate markets, which offer excellent opportunities to invest your money in the field of real estate. At the forefront of these markets is the Gulf market, which is led by the UAE or Dubai in particular, as well as the real estate market in Egypt.

Although many are searching for which of the two markets is better, the question remains: Is the comparison between the real estate market in Dubai and the real estate market in Egypt valid?

To find out the answer to this question, you can read the rest of the article to find out the most important information about real estate investment in Egypt and the UAE, through which you will be able to decide your preference.

If you are interested in real estate and following the most important events, we advise you to keep updated with our weekly articles, in which we discuss many economic and real estate topics.

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Is it valid to compare Egypt with the Arab markets in real estate?

First things first, it must be taken into account that any comparison that is made must be equal in terms of circumstances and parties to be accurate.

Therefore, when proceeding to compare the real estate investment situation between Egypt and Dubai, a set of criteria that properly establish this comparison must be identified.

Real estate conditions and nature differ in both Egypt and the Emirates, specifically Dubai. However, there remains a group of factors that can be considered to assess the effectiveness of each real estate market for any investor or person willing to pump his capital into the real estate field.

The most important points that we will discuss in this topic are:

Nature of living
Real estate bubble crisis
Laws regulating the real estate market
The parties involved in the real estate market
Sale and rent
A summary of the differences between real estate in Egypt and real estate in Dubai

Conditions of each market

Despite the many differences, we can see that both real estate markets in Egypt and the UAE are very attractive and offer very noticeable and strong growth rates.

The real estate market in the UAE is global and contains many, varied and different foreign investments. Due to the diversity of the nationalities of its residents. You will find that real estate investment takes the same foreign aspect, and you will find that many real estate developers are foreign.

Due to the nature of the UAE and Dubai, you will find that the rental movement is very strong and is considered one of the biggest sources of profit for any individual thinking about real estate investment in Dubai. It is worth noting that the UAE benefited greatly from the 2022 World Cup, which was held in Qatar. Given the proximity of the UAE to Qatar.

As for Egypt, you will find that the market can be divided into clear proportions. For example, foreign investments amount to about 25% of the market, and 50% is invested by Egyptian expats who live abroad.

It was also noted that the inflation movements and the rise in dollar prices, although they have much damage to the internal situation, on the other hand, the recent EGP flotation has contributed to increasing the investment in residential real estate for Egyptians who live abroad.

What distinguishes developers in Egypt is that the majority are national companies, which increases the element of safety. In this way, we will find that the residents in Egypt tend to buy and own real estate, especially buying in developer projects.

Learn about the difference between direct selling and resale by reading this article 5-point article to learn about the difference between primary selling and resale. choose what suits you.

The real estate bubble crisis

The most important factor that any investor searches for is the element of safety and the stability of the market in which he will push his money. One of the biggest crises that any real estate market can face is the real estate bubble.

This phenomenon is considered one of the most important differences based on which you can distinguish between the real estate market in the UAE and the real estate market in Egypt.

First, what is the definition of a real estate bubble?

The real estate bubble is simply a burst in real estate prices until they reach unsustainable levels and then decline. A real-estate bubble is considered a temporary phenomenon and does not last for a long time, but its impact is strong.

Real estate bubbles begin with an increase in demand for real estate with a lack of property in the market, which leads to an irrational increase in prices that exceeds purchasing power.

This increase is followed by a decrease in demand and stagnation in the market with an increase in supply, and finally, this leads to a sharp drop in prices and the bursting of the bubble.

One of the biggest advantages of the Egyptian real estate market is its ability to stand firm in the face of strong crises and overcome them. The real estate market in Egypt is not exposed to the danger of real estate bubbles, which makes investments stable, and real estate prices continue to increase logically according to the market situation. This point provides the safety factor for every investor.

As for Dubai, despite the strength of the real estate market and that it is considered one of the mature markets, real estate in Dubai is constantly exposed to the phenomenon of real estate bubbles, which affects all investors and the economy as a whole.

It is noteworthy that the largest real estate crisis that occurred in Dubai was in 2008-2009, and Dubai was able to recover from it within three years, and the real estate bubble repeated in 2017-2018, and some economists expect another real estate bubble to occur in the period from 2025-2026.

This point may be a pivotal point to some, especially if you are not sufficiently aware of the conditions of the market in which you will invest, because you may suffer a heavy loss if you rush and make some decisions at the peak of the real estate bubble.

We always advise you to do your research and know the conditions and nature of any real estate market that you consider investing in. It is never recommended that you make a sudden entry with your capital or investment without knowing the finer details that make your investment safe.

Rules and institutions regulating the real estate sector

One of the biggest differences that you can find between Egypt and Dubai is the set of laws and institutions responsible for regulating real estate activities. Of course, this element is one of the biggest factors that are taken into consideration, but it is not the only factor on which you can make an investment decision.

First, Egypt:

In this regard, the Egyptian market lacks the legislative and legal part that monitors and supervises the movement of real estate investment. Given this, you find that some of the gaps or difficulties that any individual who enters the field of real estate may face are the lack of a party that resolves the dispute or dispute and solves the problem.

The real estate market parties in Egypt are limited to 4 parties:

The seller: In this case, the first owner of the property, and the sale process falls under the resale market.
The Buyer: A customer interested in buying or investing in real estate, whether residential, commercial, or administrative.
Real estate developers: These are the companies that implement and construct projects and put them on the market.
Real estate marketer or real estate broker: a group of companies or offices that market projects and help you buy or sell. Read this article to learn more about how a real estate consultant can help you, 5 key points.

The real estate equation lacks other parties, which guarantee the right of each party:

Banks: It is the entity that guarantees the process of paying installments or giving real estate loans.
Law firms specializing in real estate: whose mission is to facilitate all legal aspects and real estate registration without any mistakes.
Real estate inspection companies: responsible for evaluating and inspecting real estate and determining whether its pricing is appropriate. Through inspection companies, banks can evaluate the eligibility of real estate loans provided to them.
Mortgage brokers: Mortgage brokers facilitate the process of searching for a bank that will finance the purchase of a house or real estate, and these offices carry out the search process and provide the best offers that suit each individual's financial plan.

Through this article, you can find out more information. News about investing in real estate in Egypt.

Secondly, Dubai:

The biggest feature of real estate investment in Dubai is that you will benefit from the supervision of state agencies over your real estate investment, which guarantees the rights of all parties. Likewise, work or investment in real estate is not a random process and is subject to a set of laws that facilitate each party's task.

The UAE set laws to regulate real estate investment after the economic crisis that occurred in 2008-2009. Where the government found it necessary to limit the losses that the economy could suffer as a result of the real estate collapse.

On this basis, the Government of Dubai has established a group of institutions to monitor and facilitate the movement of real estate development and investment:

Dubai Land Department: This department was established in January 1960, but in 2013 a decision was issued defining the department's objectives and considering it to be the government agency concerned with regulation, registration, and real estate development.
Dispute Committee: It is the committee responsible for settling all disputes and differences that may occur between the different parties, whether the seller, buyer, marketer, or real estate developer.

To activate the role of these institutions, the tasks they perform have been identified through:

Real estate services, whether for registration or any type of transaction
Integrated legislation and data
Effective partnerships
A leading digital data network
Qualified human force

Advantages of the real estate market in Egypt and the UAE

In this paragraph, we will help you to know the advantages offered by real estate investment in Egypt and the UAE.

Egypt:

The Egyptian market is stable and not exposed to real estate bubbles
Real estate prices increase periodically according to market conditions
Real estate is not affected by any internal or external events
The ongoing investment in public infrastructure and energy remains a major growth driver in Egypt in the long term.
The Egyptian market is a very large market due to the increasing demand every year for the real estate product
The establishment of new cities paves the way for the implementation of many real estate projects
Real estate prices in Egypt are low compared to the rest of the global markets, which makes it a good opportunity to invest now

The Emirates (Dubai)

You can easily buy and register your property in half an hour, especially in resale,
There are no real estate taxes
When you buy real estate, you get facilities to reside in the UAE
It is not required to be a resident of Dubai to own and manage a property
Rental yields are very high and you can get a full year's rent
Ease of real estate loans
The government is considered a third party between the buyer and the developer, and when any dispute occurs, the Dispute Committee is responsible for resolving it

We wish that we helped you understand more about real estate investment in Egypt and Dubai.

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