Conditions may be challenging in Egypt, but the property market is refusing to go down without a fight. The Sixth of October for Development and Investment Company (SODIC) saw strong growth in the second quarter of this year, showing Egyptian real estate can be resilient to turbulence, Zawya reported.
In its Q2 net revenues, the firm posted a 152 per cent quarter-on-quarter increase of EGP 327 million (£297 million approximately). This is just slightly down on the EGP 336 million recorded during the same period last year and is the result of deliveries in New Cairo and Cairo, the news provider reported.
Efforts from the government to stabilize the economy amid the current turmoil are expected to help make property one of the more attractive investment options. Cairo-based Pharos Research explained to Zawya there are five main drivers of growth in the Egyptian market that could perk up the property sector. These include declining interest rates, the government stimulus plan, capital controls, absence of other alternative investments in the short term and potential inflationary pressure.
A lack of development land is also having an effect on prices, pushing them upwards. SODIC told Reuters that the country is suffering from a dearth of viable land and new tracks need to be approved. While in the short-term this could be positive for existing property prices, failure to release land could lead to a housing shortage and impact upon the construction industry. Currently, Egypt only has enough land to plan for the next two to three years.
SODIC’s managing director Ahmed Badrawi told the news provider that a run of political stability could see the situation improve. As more land tracts are released, investors will be encouraged to plough money into the region and take advantage of pleasing fundamentals. Of course, domestic stability will also be crucial to ensure the real estate market isn’t just simply surviving, but its resilience bodes well for the future and a return to growth.