RE/MAX Al Mohager, a real estate brokerage, aims to achieve EGP 4bn contractual sales for developers this year, an increase of 38% compared to 2019, according to Mohammad Degheady, the franchise broker owner.
The company conducted about 1,300 real estate brokerage operations last year, including residential, commercial, administrative, and service units.
Egypt’s real estate market is witnessing some changes in this period, most notably, price increase of about 15% for residential units, with the purchase trend of ready-to-deliver. However, real estate companies will continue to provide long-term payment schemes to support sales.
“Companies that will not focus on different elements and create new executive and marketing mechanisms this year will be out of competition and away from the client’s preferences, given the similarity of a large part of real estate products in the recent period,” Degheady explained. “There is a need for companies to focus on innovation in its projects in order to suit the needs of clients.”
He pointed out that the most prominent challenge for real estate companies for the new year is to adhere to implementation and delivery dates, especially since the last year witnessed a shortage in liquidity for many real estate companies due to a decrease in sales, causing many of them to delay their projects’ delivery.
Moreover, the companies that delivered their projects are required to focus on providing a means of subsistence and the integration of services within the project in order to benefit from the delivery of units on time.
He stressed that the Federation of Real Estate Developers is an opportunity to regulate real estate market and classification of companies so that the customers can make a choice based on the developer’s classification and his ability to adhere to the implementation and delivery dates, which can benefit the market in the coming period.
He further noted that weak purchasing power is still a challenge facing real estate developers during the new year as a result of continued stability in the income of the targeted customers. This new found stability means that companies will have to work harder to meet the needs of their largest segment of the housing market, middle-income housing units.
Additionally, he expected a decline in the market trend to build commercial and administrative units, especially since Egypt has seen an explosion of these spaces in the past few years and suffering from a lack of selling. For example, New Cairo has about 130,000-sqm of unused commercial and administrative space and an additional 300,000 sqm commercial space, which translates to mass congestion if they’re bought up or non-exploitation if they are.
He continued: “City authorities must distribute licences to implement service projects according to the masterplan for the city and in a way that properly distributes services and achieves integration in the city.”
He explained that the company has been operating for nearly 30 years in the market and works under the umbrella of RE/MAX International. The company markets residential, administrative and commercial projects and owns three branches in New Cairo, Sheikh Zayed, and Heliopolis, as well as a company portfolio comprising of 211 diversified projects.
Moreover, the company also provides market studies for real estate developers.
He revealed that the company intends to launch a new online sales platform, through which units for various real estate projects are marketed, which is in line with the state’s plan to export property.
He stressed the importance of providing real estate units that are in line with what a foreign customer wants, namely the implementation of fully finished units.
The share of foreign clients who purchased units from the company does not exceed 2%, he said.
There must be a specific strategy to participate in foreign exhibitions every year to reach a large number of foreign clients who have a desire to buy and invest outside their country, he highlighted, calling on the government and private sector to cooperate in facilitating the ebbs and flows of foreign purchasing.
He pointed out that the demand is centring around east Cairo, especially in the New Administrative Capital, which is an essential destination for clients looking for a unit to live or invest in, after the completion of the first phase in mid-2020. At the level of coastal projects, North Coast remains a destination for those looking for second home, with the progress of the implementation phases of New Alamein.
Degheady remains optimistic about the Egyptian real estate market, especially with the improvement of customers’ purchasing power, steady development of local economic climate, interest rates cuts, and the Central Bank of Egypt’s initiative to finance middle-income housing.