The Egyptian real estate market is undergoing a correction phase, Alia El-Nagdy says to Osool Misr

Alia El-Nagdy, CEO of Mint Real Estate Assets, said that the current slowdown in sales in the Egyptian real estate market is normal and healthy. She explained that real estate markets go through cycles that require periods of calm from time to time to reform and regain balance.

In exclusive statements to Osool Misr, El-Nagdy said that the slowdown in sales is not a negative indicator, but rather part of the correction process. She explained that the recent period witnessed the entry of a segment of investors who were operating in the short term, whereby the investor pays only a down payment and two installments, then resells the unit to achieve quick profits. 

She explained that this segment has disappeared at the present time because this investment model does not exist in any global real estate market, and that the market is on its way to becoming healthier and more stable with the presence of genuine investors who understand the value of real estate as a long-term investment. Developers bear the burden of customer financing as marketing expenses soar, raising real Estate prices.

Al-Najdi explained that the recent rise in real estate prices is not due to developers, but rather to multiple economic factors and pressures. Today, developers are both developers and financiers, bearing a significant burden of customer financing, which adds additional costs to unit prices.

Construction costs have jumped by about 70% in recent years

She noted that construction costs have risen by about 70% over the past five or six years, and this increase is putting pressure on companies' budgets and making project costs much higher than before.

She added that land prices have also witnessed a rise in the recent period, in addition to a significant increase in marketing expenses, which have a significant impact, especially on new developers seeking to establish themselves through intensive advertising campaigns. This increases the financial burden on companies, ultimately falling on the shoulders of customers.

She emphasized that all of these factors combined explain the increase in real estate unit prices, not the developers' desire to achieve exaggerated profits. Al-Najdi continued, stating that profit margins have changed significantly compared to the past ten years, explaining that global economic pressures and geopolitical changes, from the COVID-19 pandemic to the current crises, have imposed significant challenges on the market. However, the Egyptian real estate sector has maintained its resilience, and major developers remain resilient despite these changes, reflecting the strength of this sector and its ability to adapt to exceptional circumstances.

Al-Najdi emphasized that real estate prices never decline, explaining: "Over the course of forty years, we have not witnessed a real decline in prices. Rather, they remain on an upward trend, even if the market goes through a correction or slowdown." She emphasized that what is happening now is nothing more than a phase of restructuring and market regulation, noting that the Egyptian real estate market has gone through more difficult circumstances in the past and has not witnessed a decline in prices.