Egypt Continues to Attract Foreign Investors with New Policies

In recent months, Egypt has undertaken a number of initiatives to bolster its real estate sector and attract new investment, especially from foreign investors. Most recently, Prime Minister Mostafa Madbouly announced a new strategy involving the sale of real estate units in US dollars. The proposal aims to attract new investment from foreign investors as well as Egyptian expats, and it was developed through collaboration between private sector developers and the cabinet. Offering property in US dollars has the added benefit of bringing more foreign currency into the Egyptian economy at a time when the local currency faces extreme devaluation. 

The proposed program allows real estate developers to offer their units for sale in US dollars. Moreover, the government will offer incentives to developers who choose to participate in the program as a way of maximizing involvement. The idea behind the program is driving the influx of foreign currency into Egypt while concurrently increasing demand for local real estate. Taken together, these two achievements will help speed the growth of projects in the New Administrative Capital and other novel sites across the country. In addition, the performance of the Egyptian Stock Exchange stands to receive a significant boost in its performance, which will only attract more foreign investment. 

Facilitating Trade with a New Egyptian Real Estate Exchange 

As part of the initial announcement of this plan, the chairman of the Egyptian Stock Exchange, Ahmed El-Sheikh, unveiled plans to create a new exchange dedicated specifically to real estate. This exchange is set to be opened in the first couple of months of 2024. To facilitate the anticipated increase in transactions expected by the plan, the exchange plans to establish a notary public unit that can help with the registration of real estate assets, as well as their transfer. This will help facilitate transactions so that the exchange does not get bogged down before it even gets off the ground. The exchange can help attract even more investors to Egypt by demonstrating how easy it is to invest in and trade Egyptian real estate. 

The real estate market in Egypt is certainly ripe for foreign investment. This market has emerged as one of the largest in the region with more than 530 projects currently under development. Altogether, these projects represent nearly $330 billion in investments. Considering that these projects are meant to relieve current overpopulation in urban centers, there is significant demand for more space. Foreign investors who enter the market now stand to make considerable return on investment, especially considering the devaluation of the Egyptian currency and overall affordability of projects.  

The Growing Potential for Foreign Investment in Egypt 

Certainly, investors outside of Egypt are paying close attention to the development that is happening in the country. Altogether, foreign expatriates have invested about $15 million in real estate throughout Egypt. However, the nation still struggles with the availability of foreign currency, which has not been flowing freely into the country. Even in the parallel market, foreign currency has not been coming into Egypt.  

This is why the government has chosen to identify the dollar as an acceptable payment method, which makes it easier for foreigners to invest in the market while also bringing in the foreign currency that is so crucial for continued development of the country. Both expatriates and foreign investors have shown great interest in houses or apartments that can serve as vacation homes, especially along the Red Sea.  

Developers in Egypt are starting to pay closer attention to serviced units, which can encourage tourism by creating rental opportunities. Moving forward, there may be greater demand for branded units, which significantly drives tourism. Participating in foreign exhibitions within the Gulf region and beyond can get people more excited about these opportunities.  

Developers also recognize that there need to be certain incentives and advantages for non-nationals to purchase and maintain property in Egypt. As large projects in the local real estate sector begin to slow, now is a turning point for creating these opportunities. Maintaining development momentum will depend on attracting foreign investors willing to put their money behind some large projects. 

The Bottom Line for Foreign Investment in Egyptian Real Estate 

Egypt is in the ideal position to Attract foreign investment. Already, the government has created policies for driving foreign investment in its real estate. These policies include the promise of citizenship, or at least residency, for anyone purchasing a certain amount of real estate. Now, the government is creating systems to speed the exchange of properties between investors as a means of increasing transaction volume and ultimately bringing foreign currency into the nation to contend with its own struggles with inflation.  

Notably, the Egyptian government is involving developers in the conversation of what buyers want and how agencies can meet their needs. With enormous developments like the New Administrative Capital and New Alamein, a lot of the development burden has fallen to developers, so these efforts to benefit developers and ease the strain on them will be critical for maintaining momentum.