Real estate investment and how the market developed in Egypt

Amal Ali 23 Feb 2023

Talking about real estate never ends, as real estate investment is one of the most important sectors that can be touched on constantly.

Real estate is one of the largest markets globally as well as nationally in Egypt. There is no doubt that the stability of real estate in any country leads to a qualitative boom in the country's economy and stability in the life of the citizen.

In previous articles, we talked about the nature of real estate investment in Egypt and the comparison between the Egyptian real estate market and the UAE real estate market. We also discussed the issue of inflation and the impact of the current economic crisis on real estate.

In today's article, we will shed light on the history of the real estate market throughout the years, the stages of real estate evolving, and how the form of real estate investment in Egypt has changed over the years. Learn more about the details of real estate development in Egypt in the coming paragraphs.

Also, do not miss following all the weekly articles through Inland website, take a look at this article:

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How did real estate start?

Many people don't know that investing in real estate or land is not modern a activity the opposite is true, it dates back centuries. Perhaps it didn’t look like the current form that we know about real estate, but one way or another, the first man began to take an interest in collecting land and building housing places to meet the primary needs, which is a sense of safety and the provision of shelter.

Some experts believe that Alexander the Great was the first to make a real estate investment when he defeated the Persians and obtained land through bargaining and negotiation. Perhaps this is not the current picture of real estate deals, but this type of activity was the first brick to develop an investment movement.

Later, the form of real estate investment developed over the years until it reached its usual form now. It is noteworthy that the word Realtor “A real estate broker” was coined in the English dictionary in 1916 by the National Association of Real Estate in the United States.

In the following points, learn about the history of the development of investment in real estate:

From 1900 to 1920, the role of the real estate broker began to appear, through which real estate was promoted, specifically residential real estate, and from here the idea of forming specialized offices began to provide mediation or real estate brokerage services.
1930-1980 During this period, real estate brokerage companies began to grow and hire a larger number of employees, which helped in expansion. Especially after World War II 1945-1950, there was a strong boom in the real estate market as a result of the great demand for investment, especially after the high demand for residential real estate purchases with the return of large numbers of war soldiers and survivors.
From 1990 until now, this stage is considered the stage of prosperity in the real estate world, especially with the introduction of technology, computers, and the Internet.

This technological revolution has greatly contributed to the development of the global real estate market and has facilitated many tasks for real estate marketing companies as well as clients.

It is mentioned that in the year 1994, it was the first time that a property listing for real estate was available through the Internet.
In 1999, customer attraction services appeared through the use of the Internet, or what is known as lead generation.

Phases of development of the real estate market in Egypt

Egypt has a peculiarity and difference at the beginning of the emergence of the real estate market and real estate investment in it.

The real estate movement in Egypt can be divided into two main stages: the first phase before the Egyptian revolution of 1952, then the second phase after the 1952 revolution, nationalization, and the transformation of Egypt from a monarchy to a republic at the hands of President Gamal Abdel Nasser.

In the following points, we will try to summarize the most important phases of the concept of real estate development in Egypt:

Pre-revolution phase:

During this period, Egypt did not know much about real estate investment, as the process of building real estate was limited to land owners or residents, which were leased to people in exchange for rent. Also, at this stage, the Egyptian government had no interference in the process of selling, building, or renting houses. The real estate scene was limited to the owner and the tenant.

1952: Immediately after the occurrence of the 1952 revolution and the nationalization decisions, the Egyptian government sought to issue some laws related to the procedures for selling and renting real estate. The revolution government also nationalized lands, limited agricultural ownership, and distributed land to the peasants.

To achieve equality for the people of the city, the government also issued a decision to reduce housing rent by 15%. This law is considered the first law regulating dealings between sellers and buyers in Egypt. As a result of these decisions, many people refrained from building and investing in real estate, and turned to invest in the stock market and other markets.

1954: Complementing the decisions of the Egyptian government to control the investment movement, the state determined the share of each governorate in real estate construction so that the percentage of construction does not exceed the limit allocated to each governorate. The reason for making this decision is to push people indirectly to industrial investment.
1961: Once again, the government issued another decision to reduce rents by 20%, followed by another decision to reduce rents by 50% on all properties. The government also prevented real estate owners from determining the value of the rent. Rather, the government is responsible for setting the appropriate rent amount. If the property owner has any objections, he can file a case and refer the matter to a competent court.
1963-1964: As a result of all these measures that wronged real estate owners and those interested in construction and investment, Egypt went through a major rent crisis. This led the Egyptian market to enter a new phase, moving away from renting towards selling property and changing ownership. Where the owner of the land builds and then sells the units immediately and stays away from all the renting hassle.

However, the ownership process was also subject to interference by the government, as it drafted a law stipulating the possibility of selling only one-third of the property, and the rest remains available for rent.

1968: With the beginning of this stage, the construction market began to change, as the people continued to build houses, but with the help of real estate companies that build and own land.
1973: At this stage, the Egyptian government entered into the construction process through governmental associations and unions, to provide housing for employees and workers. The government contented itself with building housing for the poor and young people.
1980-2000: The Egyptian government's efforts continued to enter the real estate world through cooperation with banks and the help of companies working on luxury housing projects, hence the emergence of compound projects.

The continuous approach of the government has also changed the nature of people's investments in real estate. So cooperation began between the constructor and the investor, and real estate development companies began to appear.

2000 until now, the Egyptian market began to keep up with the global movement in real estate and opening up to other markets. The real estate market in Egypt is currently considered one of the largest markets that attract investment.

The concept of compounds in Egypt and how they developed

As we mentioned before, the idea of the compound emerged in the early 80s with the Egyptian government's tendency to build residential communities, whether for employees or low-income groups. It is noteworthy that the first residential compound built by the government was on the sixth of October. It was built with a grant from the UAE government and was named Sheikh Zayed due to the financial grant. After that, Sheikh Zayed City began to undergo urban development and investment until it became a destination for luxury and distinguished housing.

The compound is defined as a residential compound, whether for buildings or any type of residential unit, in one area surrounded by a closed wall and has a security and guard system. With the advent of real estate development companies, residential compounds have become one of the most luxurious real estate products offered in the Egyptian market.

Current real estate investment movement in Egypt

The field of real estate in Egypt is considered one of the best sectors that attract investment today, due to the studies Egypt’s market facilitates investment, pumping money into this field, and achieving profits.

Here are the most important factors that make real estate investing in Egypt a safe and profitable field.

High income: Among the factors that helped the development of investment in real estate is the high income of citizens compared to last decades, which opened more room for thinking about investment, and this is what made the demand for buying real estate not only to provide housing but also to store money value and preserve capital. You will find that the Egyptians, for decades, have resorted to preserving their money in the form of assets, whether gold or real estate.

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Land cost: The cost of purchasing land is relatively low compared to buying real estate. In many periods, the Egyptian state sold a lot of land for low prices to encourage investment and establish projects, whether industrial or residential.
Rising population: The increase in population numbers every year ensures an increase in demand for residential real estate as a result of the high number of people in need of buying housing properties.
The general climate for investment and urban expansion: One of the biggest influences on the success of any economic sector is the state's interest in this field. The Egyptian government is very supportive of the real estate investment sector because it is an essential part of the comprehensive development plan.

It is noticeable in recent years, especially with the assumption of President Abdel Fattah El-Sisi that urban expansion comes at the top of the priorities of the Egyptian state. In this way, you will find a tendency to urban expansion by building new cities such as the New Administrative Capital, New Alamein, New Mansoura, and many others.

The government allocates part of any new city to be dedicated to social housing projects and also encourages investment, whether foreign or real estate.

Important real estate projects in Egypt

If you are interested in following up on the latest real estate projects in Egypt currently, you can follow the Inland website as well as our social media. It is your first destination to stay informed of a project as well as real estate news. Through the following links, you can learn about the most important and luxurious real estate projects:

Sheikh Zayed projects
New Zayed's projects
New Cairo projects
New Administrative Capital projects
New Alamein projects
Ain Sokhna projects

For more information and free real estate consultation, do not hesitate to contact the Inland team at this number 01003366453

Also, keep up with the latest real estate news.