Egypt's real estate sector to decelerate in 2020
Beltone Financial Investment bank expects the real estate sector to decelerate in 2020 as real estate sales have lost pace or are coming flat, driven by continued oversupply risks in upper middle and high-end project offerings, and slower price increases due to slower inflation readings and stabilisation in the cost base. Beltone analysts continue to list tier-1 developers, namely TMG Holding (TMGH), Palm Hills Developments (PHDC), Emaar Misr (EMFD), Orascom Development (ORHD), Sodic (OCDI), and Madinet Nasr Housing (MNHD), as they capitalise on their names and track record to drive new sales versus the small and medium sized new entrants. These tier-1 developers also deliver 7k-10k units per annum combined, which is relatively low compared to the target client segment, representing 2%-3% of Egypt's growing population as well as the number of marriages of up to 900k per annum. Real estate sales grew by 2% year over year (YoY) during 1H19 to EGP 31.7bn, compared to 53% YoY growth in the first half of 2018 (1H18) versus 1H17, which looks to be the only slight growth due to existing projects nearing completion, thus slowng down tier-1 developers YoY from launching new real estate. However, Beltone analysts expect 2H19 to be stronger, driven by new project launches toward the end of the year, reaching total sales of EGP 67.2bn, higher by 18% y-o-y.
Tags : INTERNATIONAL