Egyptian real estate stocks also perform very well, even when the country's blue chip stocks are trading session.
In spite of the looming effects of the global market slump and real estate markets all over the world experiencing their own downturns, Egypt's own real estate market is experiencing a relative upswing. Regardless of increases in the cost of materials and labour, investors and developers continue to be attracted to the property investment opportunities available.
HC Securities recently released figures stating that the cost of construction in Egypt dramatically increased by nearly 27% since January of this year. Pushed upward by regular hikes in the cost of raw materials, specifically steel rebar and cement, the price of labour and other construction costs have also increased.
A representative from HC securities further stated, "Nevertheless, construction sector in Egypt is growing remarkably, fuelled with heavy gulf investments. Dwellings average price per square meter will reach levels as high as EGP 8,000. Investments will continue to pour into the economy, fuelling growth across the board. Egypt has been attracting investments, and with a US slowdown and a possible similar scenario taking place in Europe, Gulf and foreign investors will be more interested in investing in Egypt, especially since growth rates are expected to remain strong in fiscal year 2007-2008."
Sunday, March 9, a substantial number of big cap stocks in Egypt's stock exchange significantly fell while at the same time, real estate stocks went up. CEO of el-Nour Securities, Hashem Ghoneim said, "Falling international markets on Friday had a negative impact on foreigner's favourites."
In regard to the general view that investors were leaving traditional sectors in favour of real estate, Ghoneim added, "This was due to the heavy weight of blue chips like Orascom and EFG-Hermes in the two indexes, but the market saw also shining performances in real estates and textiles."
Although Egypt is not completely immune or shielded from the financial issues which appear to be affecting the rest of the world, real estate appears to be the lesser of two evils – the other one being the stock market. Investors are moving their money into more property and real estate vehicles, at least for now.
