Despite a recent dip in the prices of some construction materials, including steel and cement, Egypt's real estate market is expected to face a wave of price increases in 2025. Economic factors such as high inflation and interest rates are likely to place significant pressure on financing and investment costs, leading developers to forecast price hikes between 10% and 30%, provided there are no major shifts in economic or monetary policies. Developers are largely in agreement that these price increases reflect a balanced outlook. Although the decline in input costs may ease the financial burden on developers, inflation rates and financing policies will remain the dominant forces shaping the market's direction in the upcoming year. Osama Saad El-Din, Executive Director of the Real Estate Development Chamber at the Federation of Egyptian Industries, predicts that real estate prices in Egypt could rise by 20-25% in 2025, despite a recent decline in steel prices and potential reductions in other construction costs. He explained that maintaining prices above previous levels is essential for developers to ensure profitability and investment returns. Saad El-Din added that many developers have already set prices for the upcoming year based on inflation expectations and return on investment, ensuring that they at least match inflation and interest rate increases. While some developers may freeze prices if cost reductions persist, a direct price drop is unlikely.
Mohamed El Aasar, Chairperson of Margins Developments, emphasized the significant challenges that the real estate sector will face in 2025. He highlighted that maintaining prices amid economic pressures and delivering projects on time would be the key challenges. El Aasar predicts a price increase of no less than 30% in the coming year. Mohamed Amin, CEO of Cratos Real Estate, shared his outlook for the market, predicting price increases between 15% and 25% in 2025. Amin attributed this rise to continued strong demand and high purchasing rates, reflecting ongoing investor confidence in real estate as a safe haven for investment. He noted that areas such as New Cairo and the North Coast, which gained notable interest in 2024, are expected to see the highest demand in 2025, driven by rapid development and strong investor interest. Amin also pointed out a growing demand for residential units and serviced apartments in 2025. These projects, offering benefits for both living and investment purposes, are gaining popularity, especially serviced apartments, which are increasingly sought after globally and attracting international clients. Sherif Mahgoub, a financial and economic expert, discussed how developers have adapted to sluggish sales and decreased demand. Some have targeted high-income buyers by launching luxury projects, such as branded apartments, while others have provided incentives like extended, interest-free installment periods of up to ten years or reduced unit sizes to cater to a broader market segment. These strategies aim to maintain market activity, although Mahgoub believes any significant price increases will be contingent on factors such as another currency devaluation or a renewed inflationary wave, which could drive more investors back to real estate. Looking ahead, Mahgoub emphasized that Egypt's real estate market needs balanced policies to support demand, particularly by improving household income levels. He concluded that developers must continue to offer innovative solutions to stimulate sales, given the current economic conditions.
