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Egypt’s Real Estate Market: Looking at the Bigger Picture

Egypt’s Real Estate Market: Looking at the Bigger Picture
FILE - Commercial Construction Site FILE - Commercial Construction Site Egypt’s Real Estate Market: Looking at the Bigger Picture By: Omar El-Shenety Wed, Sep. 26, 2018 CAIRO - 26 September 2018: There has been a debate lately about whether the real estate sector is going through a bubble that will end in disaster (as advocated by some economists) or is growing normally and responding to real demand (as advocated by developers). To answer that we need to look at the bigger picture of the sector and assess the bubble concern from a strategic standpoint, forecast how this issue will unfold and identify how best to deal with it. Looking at the bigger picture of the sector, there are seven key points that are worth highlighting. First, real estate is a very important sector for the economy, where real estate properties represent around a third to half of Egyptian families’ wealth at middle and high-income classes and even more than that for lower-income classes. In addition, real estate companies publicly listed on the Egyptian stock exchange have witnessed a double-digit growth in their revenues supporting their market capitalizations. On a macro level, the real estate sector has been growing at more than 20 percent lately and its overall contribution to GDP has exceeded 10 percent. Second, the real estate market is not a single homogeneous sector across the country, where geographically that market is split between first homes in Greater Cairo which is dominated by large and mid-scale developers, second homes by the beach, which has a wide mix of developers and other areas across Egypt which are

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