What Do You Know About Egypt Real Estate Bubble ?

Did you hear about the “housing bubble” or the “real estate bubble” but you didn’t understand what it means?  Rather, did you hear about the “Egypt real estate housing bubble”?

It is worth mentioning that many people who understand the concept of the real estate / housing bubble started to fear that a one will take place in Egypt affecting the real estate market and they started to back up from buying or investing in the Egyptian market for this reason.

Either you have heard about these topics and know what they mean or you haven’t heard about these terms and want to understand what they mean, you need to read this article to know all about the housing bubble, what it means, what are its dimensions and if we have a one in Egypt.

So, read the article till its very end and get ready to grasp the full idea behind the Egypt real estate housing bubble.

What is a Real Estate Or a Housing Bubble?

We cannot talk about our core idea which is the Egypt real estate housing bubble without first explaining what a real estate bubble is so, let us first explain this concept.

Primarily, we all do know that any market is ruled by the laws of supply and demand and that any distortion in any of them, causes a crash on this market.

Similarly, a housing or real estate bubble occurs when demand, speculation, and reckless spending drive up house prices. Increased demand in the face of constrained supply is typically the catalyst for housing bubbles.

By putting money into the market, speculators increase demand even more. Prices fall and the bubble bursts when demand declines or remains unchanged while supply rises.

In other words, a real estate or a housing bubble is when the supply of real estate is greater than the demand for real estate in the real estate market.

Let us now understand what causes the housing bubble in order to be able to understand the reasons for the Egypt real estate housing bubble later on.

Don’t forget to take a look at this article to understand the main real estate terminologies.

What are the Causes of a Housing Bubble?

As we explained above, it is all about the increase of supply over demand. Real estate prices increase when demand exceeds supply unless there is a natural disaster that could reduce the supply of homes.

Because it takes a long time to build or repair a house, the housing supply may respond slowly. For example, there just isn’t any more land available for construction in some urban locations or maybe some local laws that prohibit the construction of certain buildings make the situation worse.

A deregulated real estate finance industry, excessive amounts of liquidity, speculative activity, manipulated demand, excessively high investment levels, or extreme mortgage-based derivative products can also be the cause of a housing bubble.

These elements may make property prices unaffordable, increasing the gap between supply and demand. Since owning a home involves significant transactions and carrying costs, housing markets are less likely to experience bubbles than other financial markets.

Borrowers may enter the market, nevertheless, if the credit supply expands quickly and cheap interest rates and loosened underwriting rules result. The housing bubble may pop if demand declines due to higher interest rates and stricter lending requirements.

Don’t forget that the investment in real estate also plays an effective role in the process. This can be through selling or flipping houses that affect both sides; the demand and the supply.

This is where the real estate bubble arrives but, the question is, talking about our country, does Egypt or will Egypt undergo a housing real estate bubble? Why yes? Why no?

Let us explore this in the following section.

Egypt Real Estate / Housing Bubble

Now, after understanding what a housing bubble means, let us take a look at the Egyptian real estate market and understand if it goes by or if it will undergo a real estate bubble.

Every now and again, there are talks of a possible bubble in the Egyptian real estate market. Usually, these talks occur due to the challenges the Egyptian real estate market faces such as devolution, currency fluctuations, and rising inflation.

Such generalizations, however, need to be carefully examined, particularly in light of the robust indicators of the market’s resilience and capacity to overcome obstacles.

Notwithstanding this, the market still faces significant obstacles, such as growing costs that reduce purchasing power, a lack of reasonably priced homes for lower-income populations, and the requirement to provide real estate products that satisfy shifting customer needs.

When it comes to adjusting to economic issues like currency depreciation and growing inflation, Egypt’s real estate industry has shown resilience. In response, businesses have created new marketing plans and provided payment facilitation, both of which have aided in their ongoing expansion.

Thanks to the growing population and its growing housing demands, the Egyptian real estate market is growing healthy and we can safely say there is no real estate bubble in Egypt.

Will Egypt Face a Real Estate Housing Bubble?

By now, we-in Egypt- are safe from housing bubbles. However, the question is still prominent, will Egypt face a real estate or a housing bubble?

Despite the numerous challenges facing the Egyptian real estate market, we can still safely say that it will not undergo a real estate bubble soon, why?

According to the world-renowned statistics website; Statista, the Egyptian real estate market is growing, healthy, and has great potential and opportunities for further expansion.

How is this expected despite the challenges facing the market? Thanks to population expansion, the emergence of new cities in the east such as New Cairo and west Cairo such as New Zayed, and the growing popularity of the North Coast among tourists.

Concerning population growth, consider that at least 500,000 new housing units are required annually due to the average of one million marriages.

Additionally, 90 percent of this need is met by subsidized housing, of which the state provides 450,000 units to qualified individuals, despite difficulties in satisfying this demand that result in waiting lists and a growing deficit.

While as for the emergence of new cities and tourist attractions, it is thanks to government initiatives in working on both dimensions; urbanizing new cities, and attracting foreign investments, the Egyptian real estate market is a fresh one ready to offer great opportunities for both, home buyers and investors.

Final Thoughts

Reaching the end of this article means that by now you know what a real estate bubble means, the reasons behind the real estate bubble, the Egypt real estate housing bubble, and if Egypt will ever face a once.

You need to know that the Egyptian real estate market is a healthy-growing one with great future potential, rest assured that you can safely invest and find a new home in Egypt.

Now, it is time to take action. How? By going through the Nawy website checking the largest inventory stock available in Egypt and choosing your new home from the different options.

Don’t forget to fill in the form in order to get contacted by one of our property consultants team who will walk you through the whole process till finding your perfect home.

Rest assured, with Nawy, your new home is waiting for you.