I recently read in news that Egypt is likely to unseat Dubai as the regional real estate King. After Saudi Arabia, Egyptian real estate market stands next in terms of investor’s confidence. What do you think? Can Egypt take Dubai’s place or Dubai will still remain the regional real estate King?
Well, that is too difficult to say at this time. However there are aspects shared by both Dubai and Egypt. Both are located on high volume sea trade routes. Both have excellent tourism industry that is booming and developing every day. The advantage that Dubai has on Egypt is the developed world class infrastructure and its ability to attract businesses as well as tourists at the same time. The number of commerce and tourism activities happening in Dubai are always much bigger. Because you know when it comes to Dubai, everything done is on a much bigger scale.
I think it can be good catching competitor for Dubai but it still lacks the spark and luster that Dubai has. Over the period of time, massive investments have also made Dubai unique and difficult for others to exactly imitate.
What do you say on that? I would like others to share their opinions on this.
As I am concerned, I read that three states have been considered to be the best traveling locations which include Jamaica, Egypt and Dubai. As Dubai’s market crumbled, Egypt property could extract the benefits from it. But I don’t think so Dubai investors could think of shifting their focuses on any other competing state.
Well, it is not the right time to compare the both regions as Egypt has not become "The Most Attractive Option" yet and Dubai has not given up. Currently, Dubai is not relying solely on its real estate sector or tourism. It is having a good mix and match of both activities and after passing through the hard times the government is taking sound steps to recover the economy. Dubai is taking larger steps as compared to Egypt. Egypt needs time to establish itself to attract tourists plus executives and investors that does not seem impossible but quite hard.
Egypt can compete with Dubai but not so soon thus Dubai will remain attractive choice for investors for long.
Well, i think that Egypt becoming a regional real estate king is quite inevitable. We need to all agree that Saudi Arabia definitely presents the most stable market in the region, nonetheless, investing in Real Estate is Saudi is quite difficult given that Real Estate property is confined only to Saudi Citizens & Companies as well as those from the G.C.C. No one would deny that Dubai did a fantastic job over the past decade, nonetheless Egypt presents a key competitive advantage over Dubai through the following factors.
1- Very little of the demand in Dubai, i.e., local home bred demand. Egypt is a population of 100,000,000 people, one fourth of the Arab World population. And just like all Arabs, Egyptians have a tendency to child rear extensively. And culturally all new-weds looks for a place to stay. Some census claim that there are 600,000 marriages every year, i.e. demand is homegrown.
2- Relatively the cost of property in Egypt, in Cairo itself (a 20 million people city), is relatively cheaper than its counterpart an any MENA capital, hence presenting a cost advantage.
3- History, Culture, and Tourism makes Egypt a regional destination of choice.
4- It's a 100% cash-based market, the mortgage market is non-existent, hence it is quite difficult for a crash to happen, such as the one that happened all over the world more then a year ago. Simply, because most houses are already paid for, and real-estate property tax is almost negligible in Egypt. Hence, it provides for a much safer investment.
5- Culturally, up until very recently a diverse set of financial saving products were lacking, and for the lack of a better alternative, many resorted to real estate as THE saving tool, and returns in Egypt where phenomenal vis-a-vis any other country in the region, as Egypt constantly fostered significantly higher inflation rates. So with ever increasing inflation & growth rates, Egypt IRR in the real estate sector, would constantly remain ahead of any in the Region.
1. Home grown demand seldom makes an attraction for foreign investments as foreign investments move in when you are in hundreds of millions like China and India which are so huge that they can say that one in every 6 people living in the world lives in China or India. That is certainly not the case with Egypt's population.
2. There are many places in the world where people living in the capital are lesser than the accommodation available resulting in lower cost for the property.
3. There are many markets in the world that only deal with cash but in spite of all the world going for cash craze transaction bonanza, you cannot prosper without the use of financial leverage. United States with all its credit crunch has also benefited from the credit leverage over many decades. So cash transactions in financial terms means you need more cash to do everything in your life, even business. A serious hindrance for businesses with higher operating cycles (the cycle starting from purchasing inventories to turning into goods selling in the market and then receiving back the cash).
4. With increasing inflation, the IRR (internal rate of return) is seriously slashed resulting in low real term investment returns and means prolonged pay back periods with diminishing returns on investments.
Kindly give me some unique perspective that is befitting only to Egypt and convincingly makes Egypt more investment friendlier attraction than Dubai.
Very enlightening comments. Egypt and Dubai are miracles in the sand. Both have their own worth and importance. Egypt has a real river, real alluvial soil, and naturally green areas. While in Dubai, sceneries and greenery is created.
Egypt has lots of locals while Dubai is full of expatriates. Both states have momentous numbers of tourists but it is the locals that are way more numerous and obvious in Egypt whereas it is the expats that are more numerous in Dubai.
So you can’t say who will get more investors or any benefits, as history says more expats are presents in Dubai and till now, many more foreigners are seeking living in Dubai which can be seen by the apartment questions people ask here.
Well it is really difficult to decide who will be the regional real estate King in future as both have competitive edge over each other but I think even if Egypt replaces Dubai as the regional real estate King it will take it a lot of time to do so.
The one doing more effort to keep its real estate market attractive and full of opportunities for the whole world will be the leader and the regional real estate King in future.
Avelina, you are right that there are so many expatriates in Dubai and several more foreigners are showing interest to get settled over there. It is all because Dubai is having enough attraction for executives, businessmen and professionals and positive business activities are also on the go.
Thus the real estate sector is in demand for investors while if Egypt wants to be the regional real estate king, it must take massive steps for establishing its economy. Real estate sector becomes attractive for investors if there must be many other attractions in the region along with real estate.
(8 Replies)
