Egypt’s real estate sector is witnessing two contradictory trends. While research and property marketing firms report a marked decline in sales, the Egyptian Stock Exchange has witnessed exceptional gains in the valuations of listed real estate developers.
In theory, the two markets operate on fundamentally different principles. The first reflects the performance of the physical property market and the volume of units sold, while the second is driven by investors’ expectations of future performance.
According to a report by The Board Consulting, market data point to a significant shift in the behaviour of both buyers and developers. The number of residential units sold has fallen by 15 per cent, with only around 15,500 units sold in the first quarter of 2026 compared with the same period in 2025.
Egypt’s 10 largest property developers recorded contractual sales worth LE271 billion this year, a modest decline of 6.5 per cent from LE290 billion in the first quarter of 2025.
This has prompted developers to adopt a new pricing strategy by offering smaller units while increasing the price per square metre. The approach is intended to preserve profit margins while keeping properties within the purchasing power of buyers.
However, despite these falling sales, the real estate sector nevertheless leads trading on the Egyptian Exchange with liquidity exceeding LE76.7 billion during the first quarter of 2026.
The combined market value of the five largest listed property developers exceeds $4.22 billion. The Talaat Moustafa Group alone accounts for nearly half that figure ($2 billion), followed by Emaar Misr at $894 million, and Orascom Development at $516 million.
The major real estate companies reported combined profits of LE41.6 billion, up 2.8 per cent year-on-year. The Talaat Moustafa Group accounted for 44 per cent of the earnings, with net profits of more than LE18 billion.
The market is currently undergoing a “sorting phase”, with large, well-capitalised developers capturing the lion’s share of business, while small and medium-sized companies face liquidity constraints and difficulty in attracting buyers.
Mohamed Fouad, a member of the British-Egyptian Business Association (BEBA) and chief executive of the Egyptian Housing and Development Company, said that real estate sales are not recognised immediately after contracts are signed.
Instead, revenues are recorded only when units are delivered to buyers, he explained. As a result, the record profits reported in 2026 reflect the exceptional sales boom recorded between 2023 and 2025, rather than current market conditions.
Fouad added that the stock market prices companies on the basis of profitability and underlying assets rather than current sales alone. The market capitalisation of the listed developers reflects the fair value of their “undeveloped land banks” whose value rises with inflation, he said, making the book value of their shares more attractive to investors.
Buyers are also attracted to established developers with proven delivery records, seeking greater certainty that projects will be completed on schedule. As a result, listed companies are steadily capturing market share from financially strained smaller developers.
According to Fouad, this will allow the major firms to emerge from the current transitional period in a stronger and more dominant position, supported by recurring income-generating assets that provide a buffer against fluctuations in the residential property market.
Amir Ashour, sales and marketing director at Tycoon Asset Management, said that investors have long noticed that real estate stocks often move in the opposite direction of actual property sales.
He argued that valuations across the sector remain below their fair value.
Ashour said that the recent decline in interest rates has eased pressure on property prices while generating strong momentum for real estate stocks since the beginning of the year. He expects a gradual price correction once shares approach their fair value.
He cited Palm Hills Developments as an example. The company’s shares are currently trading between LE13 and LE15, while the HSBC bank has estimated their fair value at LE17.9, supported by strong cash flows and domestic and international expansion plans that could lift the company’s cumulative sales over the next five years to LE1.4 trillion, despite weaker sales in the first quarter.
Ashour also pointed to the shares of the Al-Shams Housing and Development Company, which surged by 100 per cent over a two-week period.
* A version of this article appears in print in the 2 July, 2026 edition of Al-Ahram Weekly
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