How Do Dollar Fluctuations Affect the Real Estate Market in Egypt?

The Egyptian real estate market has recently witnessed a noticeable increase in property prices, and many may wonder about the reasons behind this rise. Is it the impact of the dollar on real estate in Egypt? What is the relationship between the dollar and the rise in real estate prices in Egypt? How does the dollar drive up property prices?

Many questions need answers and clarification so that investors and clients can choose the right time to purchase a property in New Cairo and other new residential and investment areas, as well as study the rise of the dollar and its impact on real estate in the Fifth Settlement.

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1) Introduction

The US dollar is the dominant currency in global trade and the international economy, and consequently, the Egyptian economy. The Egyptian economy generally relies on imports in many vital sectors, including iron, cement, construction materials, petroleum, and other essential elements. Therefore, the exchange rate of the dollar is closely linked to many important sectors in the Egyptian economy, especially the real estate sector.

The fluctuations in the dollar exchange rate in Egypt today directly affect the stability of raw material prices used in construction, and consequently, real estate prices as a natural result.

2) Overview of the Importance of the Dollar in the Egyptian Economy

The US dollar is one of the most influential factors in the Egyptian economy due to its vital role in many fields and as the primary currency used in import and export operations. Since the Egyptian economy heavily relies on imports, the impact of dollar fluctuations extends to all sectors. Many essential materials such as construction materials, energy, medicines, and food are imported from abroad. Therefore, any fluctuation in the dollar exchange rate directly affects the prices of goods produced or related to these materials.

Additionally, the US dollar is the primary currency relied upon by the Central Bank of Egypt in managing its foreign reserves. Thus, any change in the value of the dollar directly impacts the foreign reserves and monetary policies in the country.

Moreover, the US dollar is the currency relied upon by investors in Egypt, whether in real estate, industry, or trade. Therefore, stability in the dollar exchange rate directly leads to stability in the Egyptian economy across all sectors.

3) The Relationship Between the Dollar Exchange Rate and the Real Estate Market

How do we see the impact of dollar fluctuations in the Egyptian real estate market, and what is the effect of dollar volatility on real estate investment?

Many of us wonder about the impact of the dollar on real estate in Egypt. As previously explained, since the dollar is linked to many raw materials imported from abroad, the most important of these materials are petroleum, cement, iron, wood, and others that directly affect the real estate sector. Therefore, the impact of the dollar on construction materials directly corresponds to its impact on real estate prices in Egypt for 2024–2025. This leads us to another important question: How does the dollar affect real estate projects in New Cairo?

As New Cairo is one of the most important destinations for those seeking high-yield and sustainable housing or investment opportunities, it is home to many massive real estate projects, whether residential, commercial, administrative, hotel, medical, or other diverse investment projects. You can clearly see the impact of the rising dollar on the real estate market in the Fifth Settlement and New Cairo in general.

4) What Is the Role of Real Estate Developers in Facing the Dollar's Rise and Its Impact on Real Estate in the Fifth Settlement?

Real estate developers play a significant and strong role in addressing the impact of dollar fluctuations on real estate investment. Developers offer flexible payment systems that support clients or investors in making purchase decisions by providing residential projects or apartments for sale in New Cairo with a low down payment and extended payment periods without interest. This allows investors or clients looking for installment-based apartments to find New Cairo one of the most attractive destinations for owning a property without being heavily affected by the rise in the dollar and its impact on the real estate market.

5) The Impact of the Dollar on Luxury Class A Real Estate vs. Mid-Range Real Estate

Studies show that luxury real estate is more affected by dollar fluctuations compared to mid-range real estate. This is because the prices of luxury properties are directly linked to the prices of imported construction materials, which are affected by dollar volatility. On the other hand, mid-range real estate is less affected due to its reliance on locally sourced construction materials to a greater extent.

6) Future Expectations for the Real Estate Market

There are several potential scenarios, whether the dollar stabilizes, rises, or falls, and we will review the impact of each as follows:

• 1 – Continued Rise: If the dollar exchange rate continues to rise, the impact of the dollar on real estate prices in Egypt, especially luxury properties, will become evident. This will undoubtedly negatively affect the purchasing power of many clients as property prices will rise sharply.
• 2 – Stability in the Exchange Rate: In the case of relative stability in the dollar exchange rate, the situation may remain balanced between investors seeking the best investment opportunities and clients looking for the best housing opportunities, both seeking the highest return on investment. In this case, demand for real estate as the safest and most sustainable investment vehicle will remain.
• 3 – Decline in the Exchange Rate: If the dollar exchange rate declines, the real estate market in Egypt may see an improvement in property prices, leading to increased purchasing power and demand for real estate. The luxury, commercial, and hotel real estate markets will thrive.

The Impact of Changes on Foreign Investments in the Egyptian Real Estate Market

What is the impact of dollar fluctuations on foreign real estate investment in Egypt?

Since real estate investment in Egypt, like other industries and sectors in the country, heavily relies on the value of the dollar, a decline in the dollar exchange rate may encourage foreign investments in real estate, especially in new areas such as the New Administrative Capital.

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Conclusion

Summary of the Impact of the Dollar on the Real Estate Market in Egypt:

The fluctuations in the dollar exchange rate are one of the most important factors directly affecting the real estate market in Egypt. This impact is evident through its direct influence on construction costs and material prices, as well as its effect on the purchasing decisions of clients and investors. Therefore, the dollar is a major force and a critical factor in determining real estate prices in Egypt.