The Middle East region is home to around 400 million people and is a key part of the global economy. Its continued growth and development, supported by increased government investment and a young population, will accelerate its significance.
While investor focus in recent years has been on the UAE, with famous projects such as the Burj Khalifa, Palm Jumeirah, Saadiyat Island and Yas Island garnering international publicity, current supply levels and new launches are stifling price growth across the Emirates. Investors are now increasingly looking at Egypt as alternative places for capital investment in the region.
The Egyptian Government's target is to increase the country’s inhabited land from the current 7 per cent to 12 per cent to accommodate the growing population, which is currently rising by 2.5 per cent annually and could reach 150-160 million by 2052.
With a population approaching 20 million, the country’s capital, Cairo, is already the most populated metropolitan city in the Middle East and set for further growth. Consequently, real estate developer Capital Group Properties launched a EGP40 billion (US$4.5 billion) residential scheme called Alburouj which involves building 30,000 homes on 4.9 sq km between the city of Suez and Ismailia Desert road.
The growth witnessed by the residential and commercial real estate markets is driven by multiple factors, including the Government’s ambitious plans to address the increasing population needs as well as its support for entrepreneurial initiatives as a key economic driver.
As a result, the country is seeing an urban renaissance, represented in the national projects that are underway as well as in the building of new cities, which will help create jobs and attract investment.
Some of the world’s biggest brands are already making use of the opportunities in Egypt with Mercedes Benz announcing plans in January 2019 to open an assembly plant in the country in order to expand its market position.
As the population in Egypt swells, the domestic demand for real estate grows, as does the demand from regional and international businesses looking to tap into a large pool of young, motivated people as both employees and consumers. The power of Middle Eastern youth to shape real estate trends, as entrepreneurs and investors, should not be underestimated.
Continued Government investment in infrastructure alongside an increasingly inspired domestic and foreign consumer base providing private capital, should underpin the value proposition of real estate in Egypt for many years to come.