Navigating the housing market can be challenging for the younger generation, often characterized by a preference for co-living, flexible leases, and low-commitment lifestyles. Young Egyptians are no exception; affordability remains an obstacle amid economic instability and rising inflation.

As of April 2025, nationwide real estate prices surged 30.4% compared to last year, outpacing the 24.4% year-on-year growth recorded in April 2024. Over recent years, house prices have fluctuated sharply due to political and economic upheavals. Reforms such as fuel subsidy cuts have also strained household budgets.

IMPROVEMENTS ARE THERE BUT NOT FELT

While Egypt’s housing market faces pressure from rising demand caused by a rapidly growing population, which increases by about 2.5 million people yearly, many find themselves priced out of homeownership.

Ahmed Yehia, a 27-year-old working in finance, plans to marry by next year and buy a house, says he’s been surviving on meager raises and bonuses for the past three years. The ongoing struggle to find affordable housing within a short timeframe adds pressure to his already long list of expenses and pending payments.

“The skyrocketing inflation only makes things more difficult. Every day I delay putting down a payment on a house feels like a lost opportunity, as real estate prices continue to rise,” he says.

The situation doesn’t seem as dire on paper, with housing prices showing relatively modest changes over the past few years: a 3.4% increase in 2022, 6.1% in 2023, and even a 4.8% decline in 2024.

However, these figures are inflation-adjusted and don’t reflect a reality in which salaries have not kept pace with the cost of living.

The numbers that truly resonate with Egyptians are the nominal—non-adjusted—figures: a 25.4% rise in 2022, a staggering 41.9% increase in 2023, and an 18.2% jump in 2024.

Newly developed properties and expansion areas are among the most expensive in the country, putting them out of reach for many young buyers. The New Administrative Capital, Dokki, El Sheikh Zayed, Zamalek, and New Cairo’s Fifth Settlement are among Egypt’s priciest real estate locations. These areas are known for their modern infrastructure, upscale amenities, and premium lifestyle appeal.

BUYER BEHAVIOR 

As a result, Yehia explains that he’s primarily focusing on newer developments in New Cairo when hunting for an affordable two-bedroom apartment, especially those offering long payment plans extending over at least ten years.

The country’s current economic pressures and high inflation impact buyer behavior and demand, says Ayman Sami, Country Head of JLL Egypt, pushing many to resort to extended payment plans and capitalizing on bank interest to support their instalments. 

“High Inflation also has a big impact on affordability, which is putting pressure on buyers, especially in the secondary market,” he adds.

According to Tamer Elfiky, Chief Commercial Officer of Ivory Investments, inflation and interest rates are still major factors in people’s decisions, just not in the way you might expect.

He notes that real estate presents a lifeline to many citizens as the Egyptian pound continues to devalue. Since 2022, Egypt has repeatedly devalued its currency four times to secure IMF loans and shift to a flexible exchange rate. 

In March 2024, the pound dropped by over 38%, bringing the average rate to EGP 50.23 per USD by May 2025 (a number that has since slightly gone down to 48.55 as of September 2025). That marks a cumulative decline of over 82% since the currency was floated in 2016.

Elfiky states that though inflation slowed to around 13.9% in July 2025, the central bank’s interest rates are still high—even after a recent cut—at 22% for deposits and 23% for loans.

“These pressures are making homes harder to afford, but at the same time, they’re also driving people to put their money into something safer like real estate. And despite everything, housing prices still jumped by 20–30% in the first half of 2025.”

He explains that demand now concentrates in trusted, brand-led projects like SODIC’s OGAMI and Caesar in Ras El Hekma and TMG’s SouthMed, where buyers value credibility and delivery rather than demand fading its focus.

COMPETITION AMONG DEVELOPERS

In response to shifting buyer behavior, real estate companies are re-evaluating their priorities. As important as location, utilities, and safety, flexible payment plans have also emerged as a key competitive advantage. 

Leading developers such as Palm Hills now offer payment options with as little as a 1.5% down payment and up to 12 years of installments, while SODIC provides plans with a 5% down payment and a 10-year term. Meanwhile, projects like Zad Residence in the New Administrative Capital allow bookings with no down payment, with installment periods extending up to 16 years.

Sami notes that there’s growing competition among developers to offer the most attractive payment terms.

“Developers are tackling this from an affordability perspective, hence the drive to extend payment terms and offer discounts on shorter payment plans.”

“The ‘how many years can a developer offer’ is now part of the product,” Elfiky says, pulling examples from SouthMed, which is marketed with 3–4% down and up to 10–12-year plans, while Caesar offers 5–10% down and 6–7-year schedules.

“This makes the primary market stronger than the secondary, as developers effectively finance buyers,” he explains. “The trade-off is higher all-in prices per sqm: the longer the plan, the more expensive the property becomes. You will notice that payment plans are sometimes the main focus of marketing and advertising campaigns of some developers.”

However, Sami notes that extended payment plans often pose risks for developers. “In an environment with high inflation, it could cause cost overruns, which means that developers will need to manage project phasing and costs carefully.”

This is particularly true when receivables remain on developers’ balance sheets. With mortgages still making up less than 1% of GDP, developers essentially operate as banks in a high-interest-rate environment.

Elfiky says, “Extended 10–12-year plans create duration risk and negative carry if costs spike. Mitigants include securitizing receivables, escrowed collections, and disciplined underwriting.”

He argues that such plans are only sustainable when backed by robust collection systems and solid financial safeguards; without these, the risk of defaults and rescheduling begins to mount.

“What ends up happening is that most developers fall into the cycle of covering the loss from one payment plan with excessive price hikes in the next phase, project, or company—kind of like paying off one credit card using another.”

ElFiky shares insights from Ivory Business Park to mitigate such risks, emphasizing that with healthy tenor structures, down payments should reach at least 10% within the first six months to protect developers against defaults. He believes extended payment plans should be capped at seven years, as anything beyond that inflates prices artificially and slows market absorption.

Regarding cancellations, the standard practice is for units to revert to the developer with a cancellation fee equal to or exceeding the 5% down payment, helping keep churn under control.

FINANCING INNOVATIONS

However, certain innovations in payment plans could significantly improve access to property ownership. Sami says,“With such high interest rates, financing costs are extremely high. We have recently witnessed the formalization of some fractional ownership companies under the Financial Regulatory Authority.”

“This allows investors and buyers to spend within their means by purchasing portions of properties, which can still benefit from capital appreciation or rental income.”

ElFiky outlines four practical innovations that could further enhance accessibility to real estate:

First, fractional ownership models are gaining strong traction. They lower entry costs and distribute ownership risk, making real estate more attainable to a broader audience.

Second, a more robust mortgage system, built on proper collateral requirements and stronger institutional oversight. This would professionalize lending practices and help prevent past market mistakes.

Third, fintech-driven consumer finance solutions, particularly for finishing and fit-outs, can ease buyers’ upfront financial burden. The FRA’s increased lending limits and improved I-Score credit assessments support these solutions.

Finally, stricter controls on off-plan sales, such as mandating that at least 50% of the superstructure be completed before units can be sold. “This would protect buyers and foster healthier market discipline,” says ElFiky.