What's at Stake this week?

March 5, 2023

The next generation of homebuyers will drive the real estate market forward! Comprised of aspiring millennials with diverse housing preferences, this demographic will be the primary focus for developers as they look to cater to them and create projects in line with their tastes and requirements in the form of smaller homes with more amenities, flexible payment plans, and smart tech features. Let’s have a look at some other takeaways from this week 👇

Market Zoom: Egypt

Egypt hopes for a positive performance in 2023

According to Egypt’s Prime Minister Mostafa Madbouly, the country recorded its highest-ever FDI in a single quarter during the period between July to September 2022, with a total USD $3.3Bn. The numbers have revealed that foreign investment in Egypt grew 94% YoY, during the last fiscal year which saw USD $8.9Bn worth of investments overall.

Following the publication of these positive figures, Madbouly has added that he aims for his government to overperform in 2023, and realize a “positive economic outlook”. There are already several projects, particularly reforms that are paving the way forward to make this ambition a reality despite continued economic tensions, exacerbated by the Russian-Ukrainian conflict that pressured many international investors to pull out their capital from the country. Furthermore, he expects that the primary surplus will reach 2.1% of GDP in the coming fiscal year, with plans to lower the debt-to-GDP ratio to 78% by the 2026-2027 fiscal year. 

Debt management remains an essential concern for the government, made even more prominent following the IMF Executive Board’s approval for a 46-month arrangement under the Extended Fund Facility (EFF) for an amount of USD $3Bn late last year. This has made it possible to disburse USD $347Mn immediately to support budgets and balances. As a result of this aid, the IMF anticipates an influx of about USD $14Bn from international and regional players, including allies in the Gulf, who have already pledged USD $20Bn to the Egyptian government in the form of deposits and investments. All this in an effort to cushion the blow on the economy from influencing political conflicts.

How do they plan to achieve economic recovery? Enter reform plans! Some of the initiatives laid out already include the following:

  • Broaden social safety nets and introduce structural reforms
  • Attract direct and indirect investments through the capital market and Egyptian bourse (EGX)
  • Welcome investors with open arms to play a part in this new reform
  • Remain fully committed to realizing this vision

Stake Shorts

Saudi’s Vision 2030 boosts real estate sector

The implementation of Saudi Arabia’s Vision 2030 has paved the way for a plethora of multi-billion dollar projects in the Kingdom in recent years, which have garnered significant international attention and acclaim for their distinctive and innovative approach. These projects, often called ‘mega projects’ or even ‘giga projects’ (such as NEOM), extend beyond real estate and encompass sectors including healthcare, tourism, arts and culture, and entertainment. Such visionary initiatives reflect the Kingdom’s holistic focus on creating rapid transformation and elevating the quality of life for both its citizens and residents.

The real estate industry in Saudi Arabia has witnessed a promising trend, partly propelled by the increased participation of foreign investors in the investment space. These investors have played a pivotal role in the significant transformations underway in the Kingdom and impacting the sector’s growth trajectory. 

By 2030, it is expected that the Kingdom will have: over 555K residential units, 275K hotel keys, 4.3 million sq. ft of retail space, and 6.1 million sq. ft of office space. The number of households in major cities like Riyadh, Jeddah, Dammam, and Alkhobar is to grow 2.24% on average, from 2.31M units to 2.88M by 2030 as well.

What to keep in mind? Demand for real estate in Saudi Arabia will not slow down any time soon as the population continues to rise at a rapid pace, and the government continues to lure foreign investors through the Kingdom’s many attractive opportunities. Not only will residential real estate come out on top, but commercial properties are also expected to be a big beneficiary.

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