Real estate prices are expected to rise 30% during 2022
General Manager 29 May 2022
With the recent changes in the Egyptian market from the rise in the exchange rate of the dollar against the Egyptian pound, in addition to the general shake-up of the market due to the Russian-Ukrainian war, many expected a rise in the real estate market starting from the second half of this year.
According to Eng. Fathallah Fawzy, Vice President of the Association of Businessmen and Head of the Construction and Building Committee of the Association, the interest rate hike by 2% in addition to the Russian-Ukrainian war, and the disruption of supply chains led to an increase in the cost of building materials, which leads to a rise in the cost of construction and thus raise Prices by real estate developers in Egypt.
"Fawzi added that most real estate development companies have already raised their prices by rates ranging from 20 to 30%."
Fathallah indicated that moving the interest rate will certainly affect real estate prices in the form of an increase in the cost of building materials and an increase in the burden of bank finances, but the price hikes that were achieved in the past can absorb the effect of increasing interest rates.
Fawzi stressed that the most prominent factors that prompted developers to increase unit prices are the liberalization of the dollar price, inflation and the increase in the price of energy, petroleum and all raw materials, in addition to the disruption of supply chains and the high cost of shipping.
He explained that the interest rate increase will not cause an increase in real estate prices, as the 20% or 30% will absorb it, and will not be a reason for companies to apply a new increase, and there is competition between different companies and therefore it is difficult for prices to move due to the 2% interest increase.
He pointed out that iron and cement witnessed a significant increase during the last period and then a slight decrease recently, expecting the prices of building materials to move slightly, affected by the increase in interest.
Ahmed Al-Ziny, head of the Building Materials Division at the Chamber of Commerce, had previously stated that rebar prices in Egypt are witnessing a state of high prices compared to international iron prices.
The head of the Building Materials Division expected iron prices in Egypt to drop again next June, to return to their levels before the April increases.
Al-Zayni said that the fair price of a ton of reinforcing iron in Egypt is about 16 thousand pounds, and the price of a ton of cement is about 950 pounds.