Egypt Manufactured Homes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)
The size of Egypt Manufactured Homes market is USD 690 million in the current year and is anticipated to register a CAGR of over 5.9% during the forecast period. The market is driven by the demand for cost-effective ways of construction. Furthermore, rising prices are a reason to shift to affordable houses driving the market.
Key HighlightsEgypt's housing market continues to deteriorate, with the nationwide inflation-adjusted real estate index falling by a massive 12.35% in the year to Q3 2022, after falling by 14.09% the previous quarter. Real house prices fell 1.14% quarter on quarter in Q3 2022. House prices increased by 0.81% in nominal terms during the year to Q3 2022, despite a surge in inflation. Annual inflation accelerated to 18.7% in November 2022, the highest reading since December 2017 and well above the central bank's target range of 5% to 9%.
Prices of residential units have been rising against a backdrop of rising inflation rates since the central bank devalued the pound and raised interest rates by 100 basis points on March 21. Developers have raised their new product prices by 15% to 25%. In terms of market dynamics, we have seen buyers rushing to buy real estate in the medium term in order to hedge against a drop in the value of the local currency against the US dollar. However, higher building material costs should not raise property prices in Egypt by more than 10%.
The Egyptian government has paid close attention to the real estate market, but much work remains to be done to regulate the local market and bring it in line with other real estate markets in the region, such as Dubai and Bahrain, which already have a fully operational RERA. Prices have historically risen faster than inflation and performed well even during times of financial uncertainty. I am very optimistic about Egyptian real estate. In general, Egypt's real estate has performed well as an investment sector during times of crisis.
Increasing demand for residential real estate driving the marketThe Egyptian real estate sector is one of the country's hottest investment areas. Property growth rates have surpassed 15%, according to the Ministry of Planning and International Cooperation. The sector has benefited from the uncertainty and instability of regional and global economic challenges. The performance of the real estate sector in 2021 demonstrates investors' focus on the sector. According to Aqarmap, the nationwide real estate price index increased by 28.3% (22.6% inflation-adjusted), compared to a 30.8% drop in the same period last year. Property investments in Egypt increased by 20% in the second half of 2021, depending on location, while land prices increased by 30%. However, these broad trends do not provide a complete picture of demand.
Housing will continue to be in high demand as the country's population grows by 2.5 million people per year and one million marriages take place. The development of several megaprojects, including the expansion of special economic zones, is stimulating economic growth. Other measures being taken to encourage economic growth include the Suez Canal, New Alamein City, and the New Administrative Capital. For example, the current authorization to use the land for public-private partnerships, combined with fundamentally solid local demand, will boost the housing market.
Despite the expected economic insecurity caused by the Russia-Ukraine war and COVID-19, which will choke the global value chain entertainment, the hotel industry, and possibly the mortgage market, will grow gradually with the reinstatement of public and private events, as well as flexible payment plans. Due to urban mobility and population movement, the renting market will likely grow, particularly in Cairo’s city centre and downtown neighbourhoods.
Egypt Manufactured Homes Industry OverviewThe Egypt Manufactured Homes Market is fragmented with many local, regional and a few global players. Some of the major players in the market are Industrial Engineering Company for Construction and Development (ICON), DTH PREFAB, Arabian Construction House Group, Middle East Caravan, Rush Projects Egypt "RPE", and many more. The rise in demand is expected to create opportunities for players to grow in the market with help of advanced technology, providing luxury housing at affordable prices.
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