Details About Real Estate Investment: Egypt Vs. Saudi Arabia

Tasneem Khalil 10 Aug 2023

There is a range of opportunities available in the real estate market. Accessing large markets and some of the most modern cities globally makes the investment options more attractive.

Available is a variety of options in each type from residential to commercial real estate that can match your preferences and financial capacity.

Investing in real estate in both Egypt and Saudi Arabia presents unique chances and factors to consider. However, there are differences in many aspects starting from economic circumstances, regulatory frameworks, cultural influences, and market characteristics. Let's dive into a comparison of the real estate investment scenarios in these two countries.

Cultural Significance

One of the main things to consider while investing in real estate is the culture. Both Egypt and Saudi Arabia are strong countries in the middle east. Egypt has a rich history with many attractions such as the Pyramids, Sphinx, and ancient temples that draw tourists from around the world. The coastal cities also attract many visitors every year as they have a perfect setting and modern architecture. That’s why Investors should consider the potential for tourism-related properties like vacation rentals and the factors that can affect demand for them.

On the other hand, Saudi Arabia is having cultural changes as it now focuses on entertainment and tourism. This evolution is changing the usual perspective about the country and therefore attracting more international visitors, but it's also important to consider cultural sensitivities and local preferences. Investors should be aware of these cultural factors when considering buying in real estate.

Tourism and Hospitality

The tourism sector is one of the main sources that affect the Saudi and Egyptian economy. Investing in tourism-related real estate can be profitable, especially as the government's efforts to promote tourism and attract visitors are increasing. Both governments in Egypt and Saudi Arabia are actively working to promote tourism which resulted in seeing a rise in international visitors. This has created a demand for high-quality hotels, resorts, and other hospitality-related properties.

Economic Growth

As there’s a rapid growth in population, the demand for both affordable housing and luxury properties is increasing. The country's economic development has a direct impact on various aspects of the real estate sector which affects demand, property values, and investment opportunities.

As the Egyptian economy flourishes, there are more business activities and expansion of different sectors which increases the demand for commercial properties. The government also takes initiatives to address housing needs in order to offer affordable housing that faces an increasing demand.

With Saudi Arabia’s vision of 2030, various sectors are expected to be affected including real estate as one of the main components. The Saudi Arabian government created a plan to improve the economy by 2030. Saudi Arabia’s real estate market is expected to grow by 60% in 2023.

As an investor, it's important to consider currency exchange rates and their potential impact on the return on investment (ROI). Consulting experts in real estate as well as financial experts can help you take the best decision and lower currency risk.

Government Initiatives

In order to encourage foreign investment in real estate, both Saudi Arabia and Egypt have allowed foreigners to purchase properties, but certain restrictions and regulations apply. Only recently, Saudi Arabia has allowed foreign investors to own properties but only in certain areas although that was restricted. These regulations have made it easier for both local and foreign investors to participate in the market. Egypt has also worked on improving investment in real estate, but the regulations can be more complex. These initiatives have opened up new opportunities for international investors interested in the Egyptian and Saudi real estate market.

It's essential to work with local legal experts to navigate the legal and regulatory landscape.

Residential and Commercial Real Estate

Providing affordable housing options is a priority for the Egyptian and Saudi governments due to the population's consistent growth. It’s a priority for both governments to provide Affordable housing projects to increase investment opportunities, especially in evolving areas.

As the population in Saudi Arabia increases and both demographics and lifestyles are changing, a new growing demand for modern and comfortable residential properties is created. And as the business environment in Saudi Arabia advances, there's another growing need for commercial properties. That’s why Saudi Arabia offers opportunities in various real estate sectors.

Egypt's tourism and population play as major drivers of real estate demand, making owning properties more appealing. The demand on residential properties is rapidly increasing which makes better opportunities for real estate investors. The historical and cultural significance of the country's attractions also create opportunities. Additionally, both commercial and residential properties are popular and gain special treatments as the economy diversifies.

Market Research

Market research is one of the most essential things before taking the decision to invest in real estate. It’s important to understand the demand and supply dynamics, the best locations, and the potential return on investment. That’s why working with local real estate agents and consultants can help you get valuable insights.

The Egyptian real estate market has experienced unsteadiness due to economic change and political instability. However, the country's growing population, government initiatives in expanding new areas, and infrastructure development create opportunities for long-term investment.

Saudi Arabia's real estate market is witnessing significant changes as part of its vision. Both the commercial and residential market are expanding due to the growth in sectors like tourism and entertainment. Investors will have a wide range of options to choose from as a result of Neom, the Line, and Vision 2030 powering investment and significant real estate developments.

Egypt's real estate market can be irregular, influenced by economic dynamics, political stability, and regional changes. Investors should be prepared for market variability and consider a long-term investment horizon to ride out potential short-term fluctuations. Conduct thorough market research before making any investment decisions. The Saudi real estate market is evolving rapidly due to economic diversification efforts. The growth in tourism and entertainment has led to a demand for hospitality and commercial properties. The residential market is expanding due to urbanization and changing demographics.

Egypt's real estate market has seen fluctuations due to economic and political factors. The country's population growth and urbanization create a demand for affordable housing and residential properties. The tourism sector's significance also drives demand for tourism-related real estate.

Long-Term Perspective

The perspective you approach your investment in real estate is really important as it’s preferred you have a long-term perspective. Real estate investment in Egypt is no different and it should be approached with a long-term perspective. It's not impossible to get short-term gains, however it’s much more preferred to make gains over time.

It’s necessary to approach Saudi Arabia with a long-term perspective. While short-term gains are possible, more value comes from holding properties over an extended period, benefiting from it.

Investment Types

As residential properties are in high demand due to population growth and urbanization, they’re considered a good investment in both Egypt and Saudi Arabia.

Saudi Arabia offers opportunities in various real estate sectors, from hospitality and commercial properties to residential developments. The government encourages investors to explore different property types. Additionally, commercial and residential properties are popular choices as the economy diversifies. Due to Egypt's real estate demand, hospitality-related properties are considered more appealing. Residential properties are also a good choice as there’s a significant growth in population. The historical and cultural significance of the country's attractions also create opportunities.

Risk Management

Both Egypt and Saudi Arabia have risks linked to economic instability, regulatory changes, and market dynamics which can impact property values and rental income. Investing in properties with strong portfolios can help eliminate these risks.