Property developers differed among themselves about the possible impact of the Coronavirus virus (Covid-19) on Egypt’s real estate sector, although they agreed it would influence other sectors and the global economy in general.
The Egyptian real estate market mainly relies on domestic demand, therefore, no harm is expected on the industry, they explained.
Globally, many real estate exhibitions were cancelled or postponed, such as the MIPIM exhibition in France, which was rescheduled from March to June. The Egyptian Ministry of Housing was planning to participate in MIPIM along with about 12 other developers.
If the Covid-19 crisis ended shortly, all economic sectors would recover simultaneously, but as no one knows when the emergency will end, the situation is getting worse.
Deputy Minister of Housing for National Projects Khaled Abbas said the delay of MIPIM would not change the ministry’s decision to participate in the international exhibition, stressing that they are determined to take part in the event in June.
Abbas added that the Covid-19’s effect was not limited to one sector, but extended to many global economies. There are also ongoing efforts in all countries to contain the consequences of the crisis. He noted that Egypt’s real estate is strong enough to protect itself from such problems as it depends on local demand.
Ayman Sami, Country Head – Egypt at JLL, said, “There is no reason to fear Covid-19’s negative effects on the real estate sector. The Egyptian real estate market is based on local demand and is still in its early stages towards exporting. The volume of Egyptian property sales abroad is too low to negatively affect the total sales of real estate companies.”
Sami added that growing local demand will continuously keep Egyptian real estate safe in such hard times, whether economic, health, or political. Besides, the government’s efforts to support the purchasing power of local customers would encourage them to turn to real estate as a safe haven for investment.
On the other hand, CEO and Managing Director of Tatweer Misr Ahmed Shalaby believes if the crisis lasted for a long time, it would direct customers to invest in other economic sectors or keep their money. Therefore, the real estate market may see a slowdown in sales for investor clients.
“It is difficult to judge consequences of this virus now. The entire world is moving cautiously and many international economic activities were cancelled for fear of the spread of the virus, such as MIPIM exhibition,” Shalaby said.
However, he projected that local real estate will not be affected by Covid-19 because local demand has been increasing, which will help the sector maintain strength.
CEO of Grand Plaza for Real Estate and Touristic Investment Sherif Ragheb said the effects of Coronavirus on Egypt’s property sector will be temporary, like other sectors that are affected by global events.
Ahmed Samir, commercial director of Al-Wadi Tourism Investment and Real Estate, believes that fear mongering among the public is primarily a political goal.
He added that the Egyptian real estate sector is far from being affected by such crises, but Egyptian tourism will be temporarily affected.
Samir expects the Covid-19 crisis to end soon, but it may lead to a real decline in demand though. Egyptian real estate always handles such emergencies and overcomes them, he noted.