Egyptians Buy Into Real Estate To Escape Currency Dive

MINI-CITIES

But if politics were more stable, there could hardly be a better case for property investment in Egypt. While demand in some Gulf nations depends on an influx of expatriates, millions of middle-class local people in Cairo dream of a new home.

Tourists enjoy strolling through the old section of the sprawling capital of 22 million, soaking up the atmosphere of its narrow lanes and mosques and dining in elegant restaurants on the banks of the Nile.

But for many Egyptians, life in Cairo is a struggle with pollution, noise and traffic jams. Many buildings in the centre are run down, dating back to the British colonial era.

“It’s so bad with all these traffic jams and pollution, so people move out,” said Sharif Abed al-Shafi, who just bought an apartment in TMG’s Madinaty as an investment to escape the pound’s fall – despite the legal dispute underway.

For those who can afford at least to pay 1 million pounds – only a small minority of the population of 84 million – developers building a host of gated residential areas outside central Cairo offer a better life.

The areas are mini-cities with shops, restaurants, gyms, swimming pools and gardens, and provide services which Egypt’s cash-strapped authorities often fail to manage: clean streets which are swept every day, a functioning garbage collection system, plenty of parking space and – important at a time of rising crime – security.

“It sometimes feels embarrassing to be providing such a thing, but even in hardship (places) people have aspirations to have a good life,” said Ahmed Badrawi, managing director of SODIC, one of Egypt’s largest developers.

SODIC plans to bring seven new residential projects online this year as it sees no let-up of demand.

“2012 was our best-ever year,” said Ayman Ismail, chief executive at Mountain View, another Cairo-based developer. “We had a dip of probably 20 per cent in 2011 – towards the third quarter of 2012 the demand came back.”

Developers and real estate agents think prices for residential units may rise by as much as 20 per cent this year, boosted by demand but also because the weak pound will raise the costs of imported construction materials such as steel.