While rising input prices and extended payment schemes continue to support sales, market participants told Ahram Online that weaker players are likely to exit, stronger developers to consolidate, and pricing to remain under upward pressure. This is influenced by global economic trends, energy developments, and evolving regulatory needs rather than speculative activity.
Islam Ghoneim, executive director of Ghoneim Group, told Ahram Online that Egypt’s real estate market is nearing a decisive turning point, with 2026 expected to mark the end of a prolonged phase of speculative buying driven largely by fears of currency depreciation.
Demand, he said, is increasingly anchored in genuine housing needs rather than short-term hedging.
He added that real estate has retained, and in some cases reinforced, its status as a relatively safe long-term investment compared to other asset classes. While gold remains volatile, property continues to function as a store of value, supported by sustained demand and structurally limited supply.
From speculation to market discipline
Ghoneim explained that earlier speculative cycles pushed prices higher without reflecting real end-user demand, creating temporary market imbalances. However, rising prices and higher entry costs have since curbed speculative activity, leaving end users as the dominant buyer segment and restoring a measure of market discipline.
He ruled out a near-term price correction, citing rising construction costs and stable demand fundamentals. Cancellation and default rates remained below two percent in 2025, indicating resilient purchasing power despite broader economic pressures.
Egypt’s Association of Real Estate Developers (ARED) highlighted 20–30 percent residential price increases in 2025 across New Cairo, the New Administrative Capital, and coastal areas, driven by first-quarter sales of EGP 290 billion (up 23 percent year-on-year) and average rental yields of 6.7 percent.
Looking to 2026, ARED projects moderate 8–12 percent price growth, fueled by stronger demand for mid-sized units, mixed-use developments, and expanded state-private partnerships, supported by improving economic transparency.
A market reshaped by energy and finance
Tarek Shoukry, chairman of the Chamber of Real Estate Development at the Federation of Egyptian Industries, told Ahram Online that the sector is entering a phase of natural reorganisation, in which only financially sound, disciplined, and well-governed developers will remain active.
“While extended payment plans have supported sales, the interest rates, despite recent cuts, remain relatively high, limiting the appeal of long-term borrowing for both individuals and companies. A more sustainable recovery would require further declines in interest rates,” Shoukry explained.
He also warned that global developments, particularly the rapid expansion of artificial intelligence, data centres, and other energy-intensive digital industries, are likely to increase pressure on global energy markets. Rising energy costs, he said, will feed directly into construction and operating expenses, reinforcing upward pressure on property prices over the medium term.
Shoukry added that strong regional demand for building materials, driven by large-scale projects in neighbouring markets, could further strain supply chains, leading to higher raw material costs and labour shortages.
Regulatory flexibility over new legislation
Speaking to Ahram Online, Karim Melesh, CEO of M Squared, said market performance in 2026 will remain closely tied to interest rate trends, with the sector expected to undergo a period of measured adjustment rather than sharp price surges.
He explained that the market is not heading toward a broad wave of mergers and acquisitions, but rather toward more strategic partnerships between landowners and serious developers.
This shift, he noted, will gradually push weaker or under-capitalized players out, while enabling stronger, more efficient firms to consolidate their positions.
Melesh added that the sector does not require new legislation as much as it needs flexible regulatory incentives to support execution efficiency and ease financial pressures on developers.
Extending land payment schedules without interest and granting longer licensing periods for projects under construction, he said, would enhance market stability, encourage responsible development, and promote fair competition in the next phase.
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