The novel coronavirus (COVID-19) pandemic has been at the root of an increased fierce competition between many real estate companies operating in the Egyptian market, according to Mohammad Degheady, RE/MAX Al Mohager franchise owner.
As a result of the uncertain economic times, real estate developers have sought to provide their best, whether at the level of marketing or providing facilities to attract a large base of customers, Degheady said. It has meant that many companies have changed their products to stimulate sales and attract customers, despite shaky consumer confidence.
Degheady added that the global pandemic has seen a more significant change in marketing methods rather than a change in unit prices.
Bucking the trend, Degheady noted that his company has, during the last six months, initiated some new flexible payment plans, including innovating the cash back method. It has also increased discount on cash payment, which currently account for 35% of transactions on units, compared to the 25% before the COVID-19 outbreak.
Additionally some companies have committed to hiring commercial units on behalf of their owners, with first instalments paid after the unit is received, he elaborated.
Degheady noted that no companies have decreased their prices, although some have decreased unit sizes to avoid property price spikes.
He further explained that the global health crisis has created a need for service apartments, whether in residential or in mixed-use projects. This type of product has previously not been widespread in many new urban projects and products in Egypt.
Meanwhile, the COVID-19 pandemic has weakened demand for medical investments, with the demand for medical units consequently decreasing during the last six months. As a result, a large number of investors have transferred medical units to administrative and commercial units, Degheady said.
“On the level of changing designs in some projects, some companies and developers were forced to allocate the ground-level and first floor areas in malls to commercial units, and to allocate the higher floors to administrative units and offices,” Degheady said.
He added, “The crisis has caused a shortage of liquidity in the real estate market, which has prompted many companies to develop projects in partnership with other companies, with one as the owner of the land and the other handling the finances of implementation in order for projects to succeed, reduce costs and not be exposed to a financing gap that hinders expansion of these companies.”
Accordingly, companies have turned to new technologies to attract clients and boost their sales, whilst also using these new methods as communication between developers and clients.
Degheady disclosed that the crisis has ensured that real estate development companies are now more serious in committing to the customer’s delivery and unit requirements.
He expressed his optimism that the return of local and regional real estate exhibitions will significantly stimulate the market, especially after a hiatus of up to seven months.
One of the important new needs expressed by customers on the back of the coronavirus pandemic has been the requirement for more privacy in units. Many clients are also now looking for one-storey housing unit, Degheady concluded.