The exit of speculators from Egypt’s real estate market, along with the artificial demand they generated that has fueled inflationary price increases since 2018, is expected to be the most notable development in the market this year, said Mohamed Fouad, a board member of the British Egyptian Business Association (BEBA).
“The rise in interest rates when added to extended mortgage periods is making property purchases more difficult,” Fouad said, noting that “the ratio of income to the average unit price in Egypt has climbed to 15.5 per cent, compared to 6.6 per cent in 2016.”
This indicates that property prices have grown much faster than incomes, meaning that would-be purchasers need to spend a far greater proportion of their earnings on housing.
This has resulted in a slowdown in the real estate sector, affecting both primary demand and resale. These conditions are expected to persist until the end of the first quarter of 2026.
The stagnation could force a number of small and medium-sized companies to exit the market, since many of them entered during the speculative boom and lack the financial resilience to endure until conditions are corrected.
Brokerage firms that rely primarily on commissions are also likely to withdraw, particularly as clients looking to buy property for investment purposes, once a key target segment, no longer carry the same weight in the market.
The negative spillover from the slowdown could extend to major real estate developers as well, through pressure on cash flows leading to delayed deliveries and slower execution.
However, their stronger financial positions should enable them to cushion the impact of the crisis until the market takes a correctional course.
The slowdown comes in tandem with a 7.25 per cent reduction in interest rates by the Central Bank of Egypt (CBE) over the past year, alongside the stabilisation of the US dollar at below LE50 for most of the year.
Further interest rate cuts exceeding six per cent are expected, according to Fitch Ratings, while investment bank Standard Chartered expects the dollar to stabilise within a range of LE47.5 to LE49.
These indicators signal broader economic stability and, by extension, a recovery in demand.
Fouad said that the anticipated demand will be genuine end-user demand for housing, rather than investment- or speculation-driven purchases.
“This year will mark a true rebalancing and the end of the correction phase in Egypt’s real estate market, underscoring its resilience, price discipline, and move away from speculative activity,” said Mohamed Magdi, investment research director at the Al-Ahly Sabbour Group.
“The ongoing filtering of companies will uncover real opportunities for investors and consumers, especially in projects built on operational value, genuine commitment, and strong financial capacity.”
Magdi expects the uncontrolled price surges witnessed during 2023-2024 to subside, with price increases in 2026 averaging between 10 and 15 per cent. These increases will be driven by actual development costs rather than speculative movements, he said.
The correction does not imply a decline in prices but instead reflects a shift towards fair pricing that represents the real value of a unit, as opposed to inflated valuations.
Since the beginning of 2025, the market has been gradually distancing itself from short-term practices and a culture of quick profits, fostering a healthier environment that is more attractive to long-term investment.
At the same time, people have become more aware of sound, long-term investment approaches suited to the nature of real estate projects. As a result, the demand currently taking shape in the market is focused on units that offer genuine value, delivering solid rental yields or realistic resale opportunities.
The last quarter of 2025 showed ready units and projects at advanced stages of development performing well. Demand increasingly shifted towards completed or near-delivery projects, driven by concerns over potential price gaps during construction periods.
It also showed that the most profitable segments remain commercial and administrative properties located in areas with residential developments and genuine occupancy rates.
While intensified competition will gradually impose greater discipline on the market, it is also expected to lead to the exit of a number of real estate development companies with weak financial positions, poor compliance, or a lack of leadership, alongside undisciplined marketing and brokerage firms.
Survival will be limited to developers capable of meeting their commitments, securing financing, and delivering quality products, as well as companies with strong financial standing.
This is largely due to the limited financing tools available to clients, which has perpetuated the phenomenon of developers acting as the primary financiers through long and flexible payment plans. Mortgage finance companies remain far from playing their natural role in the market, increasing the financing burden on developers and pushing out those unable to bear it.
Mohamed Samir, a real estate finance expert, sees a more dramatic scenario in the sector in 2026, arguing that “a wave of bankruptcies among distressed companies is inevitable”.
“Projects of exceptionally high value and those capable of prompting major developers to pursue full or partial acquisitions are very limited in number and are likely to be concentrated along the North Coast,” Samir said.
“With very few exceptions, developers will show little appetite for partnerships or acquisitions that could drain liquidity and add to their financial burdens on top of commitments to their main projects,” he added.
Ayman Abdel-Hamid, managing director and deputy chairman of Al-Oula Mortgage Finance, ruled out a decline in property prices in Egypt this year, despite improvements in most cost-related factors, such as interest rates, the exchange rate of the dollar, and construction materials.
Egypt’s real estate sector, he said, had experienced a clear slowdown over the past year, driven by a combination of factors, most notably the sharp rise in prices.
The increases recorded during 2025, ranging between 15 and 25 per cent, represent natural levels of growth, and the extraordinary price surges of up to 100 per cent seen in 2024 are unlikely to be repeated.
Abdel-Hamid expects the current slowdown in the property market to persist until mid-2026, with demand beginning to improve gradually during the second half of the year.
* A version of this article appears in print in the 15 January, 2026 edition of Al-Ahram Weekly
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