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Next Move: Whither Egypt’s property market?

The third annual real estate fair, Next Move, opened at the Cairo International Conference Center on Wednesday 28 April and will continue until Sunday 2 May. Attending the opening day was Ahmed el-Maghrabi, minister of Housing, who inaugurated the fair to the lineup of invitation-only visitors.
The fair is dominated by multinational companies offering a variety of compound projects around Cairo and in different spots on both the Mediterranean and the Red Seas. Each company has a themed booth with decorations ranging from simple tables with miniaturizations of their future projects to fancy installations modeling a villa or lagoon.
According to the organizers, projects with a total cost of LE300 billion are all gathered under one roof for the event and are targeting all different levels of society with the diversity of projects located throughout multiple cities and tourist areas. In its debut year 2008, the event attracted more than 20,000 visitors, followed by 22,000 visitors in 2009. Organizers are expecting 27,000 visitors this year.
“The concept that we are only offering housing is misleading” says Tarek el-Shazly, chief executive officer of Barwa, the real estate developers behind the highly advertised New Cairo project. “New Cairo is actually an entire city that we are building on the fringes of the Egyptian capital.”
New Cairo is designed to be an actual city that will offer different facilities and opportunities for interested people. “We have villas for families like yours and mine to live in,” says el-Shazly, as well as, “apartments for newlyweds and smaller apartments for youngsters who go to the nearby universities.” When asked about the potential clientele for these real estate investments, el-Shazly explains that “although the project is targeting A+, A and B+ income earners only, all levels of society can find a place in New Cairo. People can come to shop in our mall there, be treated in our international hospital or work in the office buildings.” The project is interesting to non-Egyptians as well, said el-Shazly, as “they find it convenient that we are located near Cairo International Airport and the major highways. They don’t feel like they have to live in downtown Cairo and get stuck in traffic for hours anymore.”
Second houses and summerhouses seem to be one of the fair’s main themes. For example, Ocean Blue is offering two beach compounds that might catch your eye. “Aside from our residential compound in Heliopolis, we are offering two projects for a second house in Egypt,” says Adel Seddiq, resort general manager of the Ain el-Sokhna project. “Both el-Sokhna and Marina projects are targeting people who are looking for a second house to spend the summer in and most of our customers so far are Egyptians. I believe the percentage of foreigners who purchase our projects won’t pass 10 percent.”
Housing is not the only aspect of luxurious living that is available in Next Move. Skyline Furniture is one of the options, and is offering “outdoor furniture for villas, hotels and real estate project that are waterproof and sunproof,” says Julien Lagier, owner and manager of Skyline Design. “We sell our products to individuals and hotel chains and we have the means to deliver them from Bangkok to your house.” Next to the Skyline Design booth, the health and sports equipment booths are offering cardio machines to help create your picture perfect house.
According to Adel Seddiq, however, real estate prices have leveled off after a “remarkable increase in the last couple of years.” He adds, “The prices of everything increased lately and the real estate market is not an exception. I would say the market increase was 10 percent over the last five years.” Iman Zaki, a real estate agent in the Maadi branch of Sakkan el-Dar adds, “Price ranges depend on the area and the project itself. … One of the projects in the Qatamiyya area, for example, would cost you between LE7200 to LE8200 a square meter.”
The prices for second houses can vary as well and can cost millions. “If you are buying an isolated beachfront villa on the North Coast with a big garden you might pay up to LE9 million,” Zaki adds.
Banks, however, are offering different solutions to help customers who are buying new houses. “Sometimes the real estate company makes a deal with a bank to pay for the house the buyer chooses and then the bank gets its money back in installments from the customer, says Zaki, “You need to prove that you can afford the house by presenting any kind of insurance such as a HR letters or previously-owned proprieties”.

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