Egypt is one of largest rising real estate markets in region: Propertyfinder

Platform has 10,000 paying customers globally, 600,000 unique users, says CEO

There is currently a lot of liquidity in Egypt which is being directed to the real estate market, said Michael Lahyani, CEO of Propertyfinder Group, adding that this will ease transactions in the sector, which will guarantee growth in real estate.
Daily News Egypt sat down with Lahyani and Mohamed Hammad,‎ co-managing director, to discuss market trends and customers' needs. The transcript for the interview is below, lightly edited for clarity.
What are your activities and where do you operate?
Hammad: Propertyfinder started its operations in 2007 and its headquarters are in Dubai and it works in several countries: Egypt, Saudi Arabia, Qatar, Bahrain, Lebanon, and Morocco, as well as a recent investment in Turkey.
We are a portal and do online marketing for real estate agencies and developers to bring end-users and clients for them. We mainly work with real estate brokers and marketing, then secondly, developers. We provide free services to people searching for property to buy or rent.
Lahyani: We have been in Egypt for about five years and we are very bullish about the Egyptian real estate market. Egypt is very important for our group and we will continue our investments here.
How many brokers and developers does Propertyfinder work with?
Lahyani: We have 10,000 paying customers globally. The majority of our clients are brokers, and developers increase with the urban development in some countries, especially in Egypt and other countries. We have 600,000 unique users and more than 4.1m page views.
How do you see the Egyptian real estate market and economy after the flotation, as well as the recent economic reforms undertaken by the government?
Lahyani: There were a couple of years that were very difficult but I received a very optimistic vision by real estate developers during my current visit to Egypt.
The real estate market is very strong because of the large population of Egypt and a lot of Egyptians need new homes and we are absolutely confident that it will be one of the biggest and most booming real estate markets in the Middle East and beyond.
Hammad: Flotation made Egypt's real estate market very attractive, as investors and Egyptian expatriates became very interested in buying property in the country.
What are challenges that faced Propertyfinder when it started in Egypt?
Lahyani: Six years ago, we spent a lot of time educating the market, meaning we brought brokers and developers up to speed on the benefits of online advertising. But at that time, advertising was in very traditional media, outdoors, and maybe TV, with very little advertising online. Education of the market was a very big challenge when we launched our business in Egypt in 2012, when Egypt had a very big problem in building online real estate platforms.
Do you participate in real estate exhibitions? Further, what are the areas most in demand in Egypt?
Hammad: We do not participate in exhibitions, but we offer clients a comprehensive search on the property they need from their home, thus there is no need to go to exhibitions or meet developers or companies to learn about a project or unit. Regarding the most areas in demand, New Cairo is the number one place.
Do you think that the rainwater crisis that affected the Fifth Settlement last month will affect the demand or prices in that area?
Hammad: I think it may affect specific projects, but I do not believe that it will affect the whole city.
What are the most common unit sizes being demanded by the clients?
Hammad: The average of popular demanded spaces ranges between 100 sqm and 150 sqm.
Which seasons witness more demand on real estate?
Hammad: Summer sees the biggest demand, especially on the second home market such as in the North Coast, Ain Sokhna, and Alexandria. That is in addition to vacations of Egyptian expatriates. However, demand is lower in the last three months of the year due to the schools and universities season.
Some reports stated that there are recessions in the real estate markets in Dubai and Lebanon. Tell us more details on this issue.
Lahyani: The real estate market in the Middle East is volatile. However, there is no recession in Dubai. Prices are going down a little bit, but transactions are still happening.
How do you see the decline in interest rate decision by the Central Bank of Egypt?
Lahyani: I think it will be positive. Besides, there is a lot of liquidity coming to the market and it will ease a lot of transactions as everyone is feeling optimistic for real estate growth.
Hammad: We expect further decline in the interest rate and this is a focal point. Most high interest rate certificates expired, the deposits of which are estimated at approximately EGP 200bn, so we expect more cash flow will be directed to real estate investment, as it represents the best saving vessel.
Should we expect an imminent real estate bubble?
Hammad: No, I do not think so. We do not depend on loans in buying property in Egypt. In fact, we basically do not have mortgage finance in Egypt, it is very little. Moreover, the real estate market in Egypt is very strong and there is no decline in prices.
Lahyani: The only market that had a real estate bubble is the UAE because the banking system there is providing mortgages and loans to people that should not have them. Other markets in the Middle East do not have as aggressive mortgages.
How do you see the second home market and its future?
Hammad: The second home market is very important for us as we do resale of units. The resale category is not small but is very large.
Lahyani: In the UAE, there are no second homes in the traditional sense, but the country is a second home for many people because there are many expatriates there, but the category is quite particular for Egypt.
How do you see Egypt's real estate export and its opportunities compared to other markets?
Lahyani: Egypt is a large country and there are a lot of Egyptians living abroad and who make their earnings in dollars, and I think it is important to buy and invest in property in Egypt. There is potential from other nationalities that are interested in buying property in Egypt, not just Egyptians, but Emiratis, Saudis, and Qataris as well.
What are the largest growing markets in the region?
Lahyani: Growth in large real estate markets is based on the population of the country. For us, the markets we are focused on are the Egyptian, Saudi, and Turkish markets, as we see they are the best potential investments.
Why do not we see foreign investments in the real estate market besides some Arab investments? What are the challenges that need to be addressed in this regard?
Lahyani: The fluctuation in currency was a challenge, but nowadays we see stabilisation in the currency exchange rate, which is good news and I think that foreign investments will come as we see more new companies operate in the market. Nevertheless, foreign companies see Egypt as a very promising and friendly market.
However, the most important issue that needs to be addressed is a lack of data in the real estate sector.
When will real estate prices stabilise in Egypt?
Lahyani: As long as there is demand, the prices will go up.