Why it is profitable to invest in the Egyptian market
The Egyptian market is gradually recovering from the revolution and crisis that the country had to endure. According to last year’s data, the national real estate index decreased by 2.2%, which is a good indicator. For comparison, in 2018 the decline was observed at the level of 19.2%.
Experts positively assess the future of the segment. In their opinion, one should expect an increase in demand for housing in the country soon. The development of construction also contributes to this; there are objects of different classes.
The cost at the real estate market subsided after the government adopted the law on free floating of the national currency rate. This led to its devaluation. If before the new strategy the dollar to Egyptian pound ratio was 1 to 8.8, now 1 dollar is equal to 17 EGP. This rate has worsened the already unstable economy, and led to a decrease in the cost of housing.
However, a drop in prices may play into the hands of investors, especially since demand for apartments and houses is quite high among the local population. The reason for the latter fact is the increase in the number of Egyptian citizens – every year their number becomes more by 2.5 million people. This trend suggests that soon the price tag at the market may grow due to the demand for housing.
Now a square meter in Cairo costs $850, and the yield of the apartment rent in the capital is 10% per annum, which is a high indicator.
Egypt is developing, the government is introducing a number of reforms aimed at stimulating the economy and strengthening it. One of such reforms is the strategy to support business investments.
The IMF has helped the government to reform the political sphere, and this has yielded results. The sovereign credit rating of Fitch Ratings and Moody’s rose last year, and GDP growth was 5.6%. According to forecasts, Egypt’s economy will continue to develop, and by the end of this year it is possible to grow by 5.8%, and in 2021 – 6%.
Since the end of last year, the country began a citizenship program in exchange for investment. It involves 5 options for investment, including the acquisition of state property or from the developer for a total of 500 thousand dollars. Besides, for the same cost it is possible to become a partner in an investment project or make a direct transfer of 750 thousand dollars to the national account in the Central Bank of the country. The funds are located there without accumulation of interest and can be taken away in 5 years.