No Real Estate Bubble in Egypt: A Unique Blend of Ownership Culture and Convenient Installments Protects the Market

The Egyptian real estate market is witnessing a heated debate about the possibility of a "real estate bubble," meaning an excessive rise in prices followed by a sudden collapse. Despite some indicators that may cause concern, there are key factors that protect the Egyptian market from this scenario, most notably the prevailing culture of cash ownership and the availability of convenient installment plans.

Cash Ownership Culture and Convenient Installments: Cornerstones of Market Stability

Egypt is characterized by a deeply rooted culture that encourages saving cash to finance real estate purchases. Historically, Egyptians have preferred to avoid debt and mortgages, relying on their own purchasing power to secure their housing. This ingrained culture makes the market less susceptible to speculation that fuels real estate bubbles, as buyers typically pay a significant portion of the property value in cash, reducing their dependence on mortgage financing.

Mortgage Financing in Egypt: Limited Use and Narrow Scope

Mortgage financing in Egypt remains limited compared to global markets. This is due to several reasons, including high interest rates, difficult financing conditions, and the fear of many to enter into long-term financial obligations. This situation reduces the chances of inflated real estate prices without justification and protects the market from the risk of a sudden collapse.

Convenient Installments: An Attractive Alternative to Mortgage Financing

On the other hand, the Egyptian market offers convenient installment options that extend for many years (7 to 10 years), allowing buyers to own real estate more easily and reducing reliance on traditional mortgage financing. This flexibility in payment attracts a wide range of buyers and contributes to the stability of demand for real estate.

Love of Ownership: A Basic Motive for Real Estate Investment

A strong desire to own real estate is ingrained in Egyptian culture, not only as an investment, but also as a form of financial security and social stability. This desire drives many to save for years to achieve the dream of owning a home, creating a real and sustainable demand for real estate.

Other Factors Supporting Market Stability

In addition, there are other factors that contribute to the stability of the Egyptian real estate market, including:

• Steady Population Growth: The population of Egypt is growing significantly, creating a continuous demand for housing units.
• Government Investments: The government is implementing massive housing projects to meet the needs of citizens, which stimulates the market and contributes to its stability.
• Improved Infrastructure: The government is working to develop infrastructure in various parts of the country, which increases the attractiveness of new areas for real estate investment.

Conclusion

Despite some challenges facing the Egyptian real estate market, the unique blend of the prevailing cash ownership culture, the availability of convenient long-term installments, along with other factors, protects the market from the risk of a real estate bubble. The real and sustainable demand for real estate, driven by the love of ownership and population growth, ensures the stability of the market in the long term.