The Board Consulting has launched its annual actual property report that showcased the distinctive accomplishments of 20 main builders, who collectively achieved over EGP 700bn in gross sales. This exceptional achievement surpasses final yr’s gross sales determine of EGP 332bn, revealing the unwavering resilience and spectacular development of the actual property market, even amidst the quite a few challenges confronted all through 2023.
The report attributes the exceptional surge in actual property gross sales to a mixture of exterior and inside components corresponding to international inflation as a result of geopolitical conflicts and the rise in US rates of interest. On the interior entrance, the value will increase in Egypt created a way of urgency and panic amongst people to buy actual property as a way to maintain the worth of their cash.
Ahmed Zaki, Managing Director of The Board Consulting, stated: “The 25% depreciation of the foreign money had a ‘Domino impact,’ leading to elevated inflation and financial uncertainty. This depreciation led to an increase in costs throughout varied sectors, together with actual property, inflicting people to scramble for safe and dependable funding alternatives.“
Zaki added that the worldwide unrest and disruptions in business routes have tremendously affected uncooked supplies, particularly building metal costs which surged to EGP 55,000 per tonne within the black market; with a notable disparity in availability in comparison with the official price of EGP 39,000 per tonne. Consequently, building supplies have skilled a median improve of 80% (excluding the totally ending supplies), leading to a corresponding 60% improve in general building prices. These prices sometimes signify about 35% of mission investments, resulting in a median 80% improve in promoting costs.
Zaki concluded by highlighting the distribution of the highest 20 builders’ gross sales in 2023, stating: “The gross sales had been generated within the following order: East Cairo, the North Coast, West Cairo and at last the Purple Sea.”
The report emphasizes that East Cairo takes the lead as the highest vacation spot of alternative, notably with the latest expansions in Al-Mostakbal Metropolis and the institution of the federal government’s headquarters in new city areas.
In distinction, West Cairo has seen great development with over 70 residential initiatives bought in 2023. It has additionally witnessed a surge in land acquisitions, notably as a result of booming expansions in Sphinx Metropolis and New Zayed Metropolis.
The North Coast has emerged because the trendiest and most sought-after second residence vacation spot. Its reputation has led to a frenzy of land acquisitions pushed by the excessive return on funding (ROI) it affords. It has additionally change into a favourite vacation spot for buyers.
The Purple Sea area has skilled vital improvement, with locations like Makadi Bay, Soma Bay, and El-Gouna evolving into engaging “first residence” choices for some. Moreover, new locations like Tawila Island have additionally emerged.
In 2023, Talaat Mostafa Group (TMG) emerged as the highest developer, attaining an unprecedented gross sales determine of EGP 140bn. This exceptional development of 322% over 2022 was completely pushed by their initiatives in East Cairo, with out the involvement of brokers.
TMG additionally expanded their presence by launching the mega mission BENAN in Saudi Arabia, spanning over 10 million sqm, and buying a 39% stake in Legacy, additional establishing their foothold within the hospitality sector.
Mountain View secured second place with gross sales of EGP 61.1bn, marking a major improve of 98% over 2022. Naguib Sawiris’s Ora and Palm Hills each claimed the third spot, every attaining exceptional gross sales figures of EGP 59.5bn. Ora witnessed a staggering 207% improve over 2022, whereas Palm Hills noticed a considerable 129% improve.
In accordance with the Board Consulting report, Metropolis Edge secured fourth place with gross sales reaching EGP 38bn, reflecting a 100% improve over 2022. Madinet Masr adopted intently in fifth place, attaining gross sales of EGP 35bn, marking a formidable 212% improve. Emaar Misr recorded gross sales of EGP 30.2bn, experiencing a slight lower of -9% in comparison with 2022. SODIC achieved gross sales of EGP 29.4bn, representing a notable 38% improve. Founders recorded gross sales of EGP 27.6bn, marking a 35% improve. New Giza achieved gross sales of EGP 26bn, reflecting a 63% improve, whereas Tatweer Misr secured EGP 25bn in gross sales, experiencing a formidable 213% improve over 2022.
The report emphasised the importance of supporting the secondary marketplace for the brand new era. It additionally underscore the significance of implementing a well-designed mortgage system to successfully handle resale dangers.
Lastly, the report advises builders to prioritize well timed building to mitigate potential penalties. Furthermore, it emphasizes the necessity for progressive options in rental market, particularly to deal with the affordability challenges skilled by youthful generations. Builders also needs to actively monitor client conduct and adapt to market adjustments to make sure ongoing success on this dynamic trade. By specializing in these areas, builders can improve their competitiveness and successfully meet the evolving calls for of the market.
