Egypt Real Estate Sector - Talaat Moustafa Group

05 October 2011
Selling prices to remain stable on supply cut; A
potentially similar scenario to 2009… 1
We believe that real estate prices will continue to remain stable (similar to
2008/2009A) primarily owing to 1) Cash nature of Egyptian housing market, with limited
mortgage penetration (0.33% of GDP in 2010A), which would not force buyers to sell their
property in order to settle the mortgage; and 2) Delay in project completion due to land
disputes and developers slowing construction activity has already resulted in cutting the
expected supply for 2011E and 2012E.
Figure 7: Average selling prices per Sq m for Villas and apartments in East and west
Cairo
In EGP
14,000
12,000
10,000
Prices held up due to
tight supply & market
being cash dominated
8,000
6,000
4,000
2,000
-
2006 2007 2008 2009 2010
Apartments
Villas
Source: Egyptian real estate companies, Credit Suisse research
Figure 8: Cairo: Expected Supply Pipeline (2011E)
Residential (Units in New Cairo Offices (Sqm of Grade A) Retail (Sqm) Hotels (No. of Rooms)
and 6 th Oct)
Current Stock (2010) 46,000 688,000 741,000 13,600
Pre Crisis- Supply 17,000 117,000 445,000 237
Post Crisis- Supply 12,750 87,000 325,000 -
% Change -25.0% -25.6% -27.0% -100.0%
Source: JLL, Credit Suisse research
1 The authors of this report wish to acknowledge the contribution made by Rahul Kaul, an employee of
CRISIL Global Research and Analytics, a business division of CRISIL Limited, a third-party provider of
research services to Credit Suisse
Egypt Real Estate Sector 4