The real estate market in Egypt is still suffering from a state of confusion following the decision to float the Egyptian pound, which led to a decline in the volume of sales by rates that reached 40 percent after moving the price of the dollar, as some real estate auctions were canceled until visibility becomes clear and prices stabilize.
Mohamed Saad, an expert in real estate appraisal, said, “The real estate market is witnessing a state of confusion following the rise in the price of the dollar against the pound. the present.”
The real estate expert expected, in exclusive statements to The New Arab, that prices would rise between 20 and 25 percent for new units, and from 10 to 15 percent for old ones, pointing out that the state of recession that is currently hitting the market may limit the rate of price increases.
He added that some real estate auctions have been postponed until prices stabilize, which may take a period of time of up to 6 months from the decision to float the Egyptian pound. As for what the market is witnessing in terms of the rise in prices of some major development companies by rates that reached 35 percent, it is a temporary situation that does not It is borne by the market movement at the present time, and therefore prices will return to normal according to market mechanisms.
An official Source in the General Union of Building Contractors confirmed that the House of Representatives approved the amendment of the Compensation Law for Contracting Contracts, Supplies and Public Services, No. 84 of 2017, which will allow contractors to exchange price differences resulting from successive economic changes, without specifying specific periods, and thus the contractors will be compensated. What happened in terms of the rise in the prices of building materials and so on, after the movement of the dollar.
Mostafa Anani, a real estate marketer, confirmed that sales in the real estate market declined by about 40 percent following the decision to float the pound, compared to the same period last year, with the exception of limited activity by Egyptians working abroad and citizens of the Arab Gulf states, as a result of the depreciation of the pound, expecting prices to rise. rates of 5 to 10 percent.
The Real Estate Development Chamber of the Federation of Egyptian Industries estimated the real estate sector’s contribution to the national product at 25 percent over the last 7 years, while Eng. Khaled Abbas, Deputy Minister of Housing for National Projects, explained that the real estate sector contributed 20 percent., percent of the national income in 2020.
The pound has lost more than 57% of its value against the dollar since March 21, after the Central Bank took two decisions to devalue the local currency within just 7 months, which caused confusion in many markets, especially the real estate market.
With the price of the dollar in Egyptian banks reaching 24.5 pounds, the government decided to raise the minimum wage for workers in the state’s administrative apparatus to 3,000 pounds ($122), starting from the current November salary, in addition to adopting an exceptional cost of living allowance of 300 pounds. pounds, but economists are skeptical about the ability of these increases to cope with the high prices.