Luxury homes for Egyptian expats - Economy - Al-Ahram Weekly

Al-Ahram Weekly

14-03-2025

A new initiative selling real estate to Egyptian expatriates in dollars could lead to an increase in luxury housing
The Ministry of Housing, Utilities, and Urban Communities is allowing reservations to be made for 5,055 houses and villas offered under the 'Your Home in Egypt' initiative targeting Egyptian expats.
The units are distributed across 12 projects owned by the New Urban Communities Authority and are on offer from 24 February to 20 March.
They represent the government's stake in high-end real-estate developments in prime locations nationwide, including Madinaty in New Cairo and New Alamein on the North Coast. When land is sold to private real-estate developers, the latter pay part of the price in the form of an agreed number of units that will be owned by the government.
The 'Your Home in Egypt' initiative was launched in collaboration with the Foreign Ministry's Department of Immigration and Expatriate Affairs to address the growing demand among Egyptians abroad for residential units in some of Egypt's most prestigious real-estate developments.
The value of the units is to be paid in dollars, a factor that helps to secure an influx of foreign exchange.
According to the initiative's website, 'the Ministry of Housing has selected the most lucrative investment locations for these projects, with units set for immediate delivery by the end of 2025. The units are situated in New Alamein, the New Administrative Capital, New Mansoura, 6 October city, October Gardens, Sheikh Zayed, Sour Magra Al-Oyoun, New Cairo, and New Obour.'
Interested buyers can pay for the units in different ways, including in installments over ten years. Cash payments enjoy a seven per cent discount.
Prices per metre range from LE19,000 ($1,145) in Valley Towers in October Gardens to LE91,000 ($3,750) in Alamein Beach Towers. Down payments are set at $5,000, while villas require a down payment of $9,000.
The high prices have come as a surprise to some, with questions being asked about whether the Ministry of Housing and the New Urban Communities Authority should yield to market pressures and reduce prices or maintain them on their current course, pushing up the curve of per metre prices in other projects not included in the initiative.
Osama Saadeddin, director of the Real Estate Development Chamber at the Federation of Egyptian Industries, said the government in most cases offers middle- and lower-middle-income housing at reduced prices, foregoing profit margins.
This necessitates the search for compensation from profits generated by high-end real-estate projects, he said. These are then used to fund housing projects for less-privileged segments of the population.
Housing ministries internationally tend to invest in areas where private developers may hesitate to do so. The state sets high price benchmarks in such areas in order to establish a pricing structure that developers follow when entering these markets, Saadeddin said.
The state operates according to an urban-development vision, complete with pricing policies and land offerings, and works alongside private developers without imposing additional burdens on the national budget, he added.
Mohamed Magdi, an investment research manager at Al-Ahly Sabbour, said that as a real-estate developer, the state can implement projects at any price level it thinks appropriate, leveraging economies of scale and its ability to navigate market challenges.
The Ministry of Housing has opted for high prices in its latest offering in order to uphold the stability of the real-estate sector, he said. Had the ministry and authority chosen to offer units in prime locations at half the price set by private developers, they could have done so. The state's strategy is to preserve the sector amid rapid economic fluctuations, he added.
In the case of the 'Your Home in Egypt' initiative, Magdi said that the state is targeting a segment seeking luxury housing, using supply and demand dynamics. This allows potential buyers to explore private-sector alternatives should they find the government's offers unsuitable.
Maged Abdel-Azim, a professor of economics and a real-estate expert, said it is unlikely that the state will reduce the prices in this latest initiative in response to market pressures because of increases in the prices of construction materials, finishing costs, and wages.
The state's housing initiatives, for Egyptians both at home and abroad, are a crucial element of its role in the real-estate sector. Because it provides middle- and lower-middle-income housing at subsidised rates, it cannot be expected to lower prices in the luxury housing segment, Abdel-Azim said.
Because of the state's growing expertise in managing such initiatives, it can recalibrate its pricing and payment structures, as was the case in previous housing projects such as Beit Al-Watan and in the initiative facilitating car purchases for Egyptians abroad, aligning with market demand and the needs of targeted buyers.
Beit Al-Watan was launched in 2012 to sell land to Egyptians abroad in dollars in order to compensate for the decline in foreign currency resources following the 25 January Revolution. The initiative attracted a good deal of interest, and the government is currently offering land as part of its 10th phase.
* A version of this article appears in print in the 13 March, 2025 edition of Al-Ahram Weekly
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