The Central Bank of Egypt (CBE) announced on Thursday, August 28, 2025, a 200-basis-point reduction in key interest rates during its Monetary Policy Committee meeting. The overnight deposit rate was lowered to 22%, the lending rate to 23%, and both the main operation and discount rates to 22.5%. This move comes as Egypt's annual urban inflation eased to 13.9% in July, down from 14.9% in June, amid signs of exchange rate stability and improved foreign currency inflows. The CBE had previously implemented two consecutive cuts in April (2.25%) and May (1%), before holding rates steady in July. Together, these measures aim to ease financing costs for investors and stimulate economic growth. Mohamed Abdel Monem, Financial Manager and Board Member at LMD, said the latest cut would open broader opportunities for real estate developers to finance new projects, enhancing investor confidence and boosting demand across residential and commercial segments. "At LMD, we believe this decision provides a genuine opportunity to stimulate activity in the Egyptian market and increase demand for real estate projects. It aligns with our vision to develop integrated communities that support national economic goals. Many Egyptian and foreign investors now share an optimistic outlook on Egypt's economic trajectory in the coming years," he explained. Mohamed Motawea, Chairperson of MG Developments, noted that the CBE's 2% cut has reinforced real estate as the most attractive investment avenue, describing it as both the safest and most profitable option. He added that the timing—just ahead of Cityscape Egypt 2025—gives the market a powerful boost. "Lower bank returns reduce the appeal of traditional savings, pushing liquidity into property. Meanwhile, developers gain from cheaper financing, allowing more flexible payment plans. Real estate, as a tangible asset, preserves value and delivers annual returns of 10–15%, significantly outperforming other investment tools," Motawea said. He stressed that the decision reflects confidence in the Egyptian economy and will stimulate demand, drive sales, and encourage the launch of competitively priced projects. Despite inflationary pressures and higher construction costs, he expects 2026 to be a milestone year for the property market. Similarly, Samir Fawzy El Sayed, Chairperson of El Tawfikia Group, stated that the interest rate cut will reinforce the investment climate and ignite a new wave of demand across all segments of the real estate market.
He explained that real estate remains the safest haven for Egyptians. "With lower bank returns, more clients will seek residential and commercial units, which will boost sales in the near term. Developers, including El Tawfikia Group, will directly benefit from reduced borrowing costs, enabling faster execution and expansion of projects," he said. Fawzy also predicted short-term price stability, followed by gradual increases due to rising demand and construction costs, stressing that the current period presents one of the best times for buyers to enter the market. Echoing similar sentiments, El-Sayed Othman, Board Member of the Association of Real Estate Developers (arD) and Chairperson of Tetra Real Estate, emphasised that the CBE's 2% cut will have immediate benefits for the sector. "Lower financing costs will stimulate purchasing decisions, particularly among middle-class families looking for affordable housing. It also strengthens property's appeal compared to traditional savings tools with declining returns," Othman explained. He forecast stronger demand for residential and commercial units in the coming months, alongside the launch of new phases by developers encouraged by improved liquidity and investor sentiment. He further predicted relative price stability in the short term, followed by gradual increases, making this period an attractive entry point for buyers. For his part, Sayed Eliwa, Chairperson of Eliwa Group and member of arD, highlighted that the rate cut enhances clients' purchasing power, drives sales, and motivates savers to shift from bank deposits to real estate—considered a more secure store of value against inflation and currency fluctuations. "Developers will also benefit from reduced financing costs, enabling faster execution and broader expansion, which will boost supply and increase product diversity. Flexible payment plans will particularly drive sales recovery in the near term," Eliwa said. Meanwhile, Hesham Ibrahim, Managing Director of Winvestor Developments, described the decision as a significant boost not only for real estate but also for the wider economy, as the sector drives dozens of related industries. "The cut reduces financing burdens for developers, allowing quicker project execution and new launches supported by flexible payment plans. With the state's ongoing expansion into new cities and infrastructure projects, Egypt remains one of the region's most attractive property markets," Ibrahim said. He concluded that real estate will continue to be the top investment choice for Egyptians, stressing that the CBE's decision marks a turning point for the sector and will define the next phase of its growth.
