Disruptions to Egypt’s real estate market as a result of the country’s economic and political instabilities are set to wane by late 2014 and 2015, according to a real estate firm Jones Lang LaSalle. These improvements on the industry are likely since some positive economic developments have already been registered in the first quarter of 2014.
According to Jones Lang LaSalle’s quarterly report, the key indicators for this improvement include narrowing of Egypt’s budget deficit, improved stock market performance and increased foreign reserves since 2013.
The Central Bank of Egypt (CBE) recorded a US$17.3bn foreign reserve in February this year. According to the Ministry of Finance, Egypt also received good news of a slumping budget deficit for the first eight months of the 2013/14 fiscal year. The margin decrease was 2.4%.
Uncertain political conditions and “construction and permit issues” have delayed completion of some projects in the first quarter according to the report, although a number of projects in the residential and retail sectors have been completed.
Egypt has already elected Abdel Fattah Al-Sisi as the President following the May General Elections, after ouster of Islamist President Mohamed Mursi in July last year. The acceptance of the results and settling down of the country is set to provide favorable conditions for increase in rentals. With Al-Sisi main opponent Hamdeen Sabahi conceding defeat, the country is said to be settling down to walk on a democratic path, which could pave way for projected improvements in real estate markets.
Before election, Al-Sisi had cooperated with Emirati Arabtec Construction Company in a bid that would see low-income youths get 1 million residential units. This could be achieved following his election.