Egypt’s real estate sector is facing mounting cost pressures driven by higher fuel prices, currency fluctuations, and escalating geopolitical tensions in the Middle East, particularly those linked to Iran, industry experts say.
Tarek Shoukry, chairperson of the Real Estate Development Chamber at the Egyptian Federation of Industries, told Al Arabiya Business that rising energy costs and supply chain disruptions have pushed up the price of construction materials, particularly steel, which has increased by about EGP 1,000 per tonne.
Shoukry added that the U.S. dollar has appreciated by roughly 10% in recent months, further raising the cost of imported raw materials and construction equipment. As a result, developers are evaluating price adjustments for residential units, with expected increases ranging between 5% and 10% in 2026 depending on project type and location.
“The recent price rises reflect the direct impact of energy and currency fluctuations on construction costs, which will ultimately be passed on to consumers, especially in premium and new developments,” Shoukry said.
Mohamed El-Bostany, chairperson of the Association of Real Estate Developers (arD), said that although regional tensions present challenges, Egypt’s economy retains structural strengths that help it absorb external shocks.
El-Bostany noted that geopolitical conflicts typically affect global economic indicators such as energy prices, shipping costs, and supply chains, while also influencing investor sentiment in emerging markets. He stressed that Egypt’s ongoing economic reforms, alongside large-scale infrastructure and urban development projects, have strengthened the country’s resilience.
He added that sustaining economic stability requires continued investment-friendly policies, stronger private sector participation, and efforts to diversify national income while expanding domestic production and exports.
According to El-Bostany, the real estate sector remains one of the most stable pillars of Egypt’s economy, supported by persistent demand for housing and services and its role as a store of value during periods of economic volatility.
He also highlighted that ongoing urban expansion and new city developments contribute significantly to economic growth by supporting related industries, generating employment, and attracting both domestic and foreign investment.
Mohamed Rashid, a real estate expert and member of the Executive Council at the Egyptian Green Building and Sustainable Cities Council, said the current geopolitical environment is directly affecting construction costs and project feasibility.
“The real estate sector depends on a wide economic ecosystem, including steel, cement, energy, transport, and logistics—sectors that are highly sensitive to global disruptions,” Rashid said.
He pointed to shipping disruptions in the Red Sea that have forced vessels to reroute via the Cape of Good Hope, increasing transport and insurance costs and pushing up the price of imported materials.
Rashid added that domestic steel prices in 2025 fluctuated between EGP 36,000 and EGP 39,000 per tonne, reflecting both local and global market pressures. He also noted that Egypt’s construction materials sector is increasingly integrated into global trade, with the country exporting more than $3bn worth of cement and steel in 2024.
From a legal perspective, Rashid said geopolitical crises do not typically qualify as force majeure under Egyptian civil law. However, they may trigger the doctrine of “exceptional circumstances,” which allows courts to adjust contractual obligations to restore balance between parties without halting project execution.
He outlined several key channels through which geopolitical tensions affect developers: rising energy and transport costs, delays in imported components such as elevators, HVAC systems, glazing, and smart technologies, as well as currency volatility that increases import costs. In addition, tighter global monetary policy has contributed to higher financing costs.
Rashid stressed that developers need to adopt stronger risk management strategies, including currency hedging, supply chain diversification, and dedicated risk management teams to ensure project continuity in a volatile global environment.
Kareem Zein, CEO of Coldwell Banker Egypt, said regional instability is also reshaping Egypt’s real estate investment landscape. He noted that Egyptians living abroad and investors from the Gulf increasingly view Egypt’s property market as a safe haven during periods of global uncertainty.
“Demand has already increased for ready-to-move-in units and hotel residences, as buyers seek tangible assets to protect against economic volatility,” Zein said.
He projected price increases of between 15% and 20% in some areas, above typical market growth rates, with the North Coast and New Sheikh Zayed emerging as key investment hotspots.
Overall, industry experts agree that while geopolitical and economic pressures are raising costs and complicating supply chains, Egypt’s real estate sector continues to demonstrate resilience, supported by strong domestic demand, ongoing infrastructure investment, and the country’s strategic geographic position.