Housing Finance in Egypt

Overview

For the French version of this country profile, click here.

To download a pdf version of the full 2018 Egypt country profile, click here.

Egypt’s population has been a contributing factor to the housing backlog that the country is currently experiencing. The devaluation of the Egyptian pound in November 2016 resulted in the expansion of the property sector, which was seen as the best choice for people who were looking to protect the value of their savings during periods of increasing inflation. The real estate sector has drawn the interest of investors and it has since realised a great flow of income into the sector. The construction sector is one of the country’s fastest growing sectors, accounting for more than four percent of Egypt’s Gross Domestic Product and it employs approximately 12 percent of Egyptian workers.

The World Bank identifies Egypt as a low-middle income nation, with a per capita GDP of less than EGP12000 (US$ 674). Therefore, housing affordability is limited despite government policy efforts, this is supported by the fact that the average wage for Egyptians in 2017 was EGP2 500 (US$140) a month while the cheapest flat in Cairo costs an average of EGP120 000 (US$6 741). Existing housing developments do not cater for the low wages of low and middle income groups, thus resulting in the prevalence of vacant units nationwide. A project which aims to build one million affordable units for low income youth across 13 cities in the country is an example of how public-private partnerships can contribute towards curbing the issue of the inaccessibility of affordable housing to low and middle income groups. Despite the affordability challenge, trends in the real estate sector show that there has been an increase in the demand for property that is offered for sale or rental purposes.

Egypt’s mega project, the Administrative Capital is set to lead the future of accommodation in the country and potentially increase the supply of housing. Furthermore, the Ministry of Housing has estimated that Egypt needs to build 500 000 new homes every year for five years to meet the increasing housing demand. The Informal Settlements Development Fund (ISDF) estimates that 75 percent of urban areas throughout Egypt are unplanned and one percent are unsafe. The Property Tax Law was amended to implement a tax-exempt ranche which is inclusive of single residential units valued at a maximum of EGP 2 million (US$112 359). Egypt’s property market is generally unregulated and has affected the ability of residents to afford housing that adequately accommodates the number of family members.

Policy shifts reflect a shift from supply-side housing subsidies towards mechanisms that stimulate private sector involvement in the mortgage market and promise to promote the rapid growth of Egypt’s housing sector and stimulate broader economic growth. In essence, a shift in supply trends is crucial for the health of the real estate sector in Egypt.

Egypt’s population has been a contributing factor to the housing backlog that the country is currently experiencing. The devaluation of the Egyptian pound in November 2016 resulted in the expansion of the property sector, which was seen as the best choice for people who were looking to protect the value of their savings during periods of increasing inflation. The real estate sector has drawn the interest of investors and it has since realised a great flow of income into the sector. The construction sector is one of the country’s fastest growing sectors, accounting for more than four percent of Egypt’s Gross Domestic Product and it employs approximately 12 percent of Egyptian workers.

The World Bank identifies Egypt as a low-middle income nation, with a per capita GDP of less than EGP12000 (US$ 674). Therefore, housing affordability is limited despite government policy efforts, this is supported by the fact that the average wage for Egyptians in 2017 was EGP2 500 (US$140) a month while the cheapest flat in Cairo costs an average of EGP120 000 (US$6 741). Existing housing developments do not cater for the low wages of low and middle income groups, thus resulting in the prevalence of vacant units nationwide. A project which aims to build one million affordable units for low income youth across 13 cities in the country is an example of how public-private partnerships can contribute towards curbing the issue of the inaccessibility of affordable housing to low and middle income groups. Despite the affordability challenge, trends in the real estate sector show that there has been an increase in the demand for property that is offered for sale or rental purposes.

Egypt’s mega project, the Administrative Capital is set to lead the future of accommodation in the country and potentially increase the supply of housing. Furthermore, the Ministry of Housing has estimated that Egypt needs to build 500 000 new homes every year for five years to meet the increasing housing demand. The Informal Settlements Development Fund (ISDF) estimates that 75 percent of urban areas throughout Egypt are unplanned and one percent are unsafe. The Property Tax Law was amended to implement a tax-exempt ranche which is inclusive of single residential units valued at a maximum of EGP 2 million (US$112 359). Egypt’s property market is generally unregulated and has affected the ability of residents to afford housing that adequately accommodates the number of family members.

Policy shifts reflect a shift from supply-side housing subsidies towards mechanisms that stimulate private sector involvement in the mortgage market and promise to promote the rapid growth of Egypt’s housing sector and stimulate broader economic growth. In essence, a shift in supply trends is crucial for the health of the real estate sector in Egypt.

Find out more information on the housing finance sector of Egypt, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2018 edition, which has up-to-date profiles for 54 African countries.

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