by Ahmed El-Mahdi: The real estate market is encountering stagnation during the holy fasting month of Ramadan, with house prices falling by 50 per cent in some governorates and by 100 per cent in North Sinai where they have been affected by recent events and the cleansing of terrorist hotbeds in the governorate, according to real estate experts and investors in exclusive statements to The Middle East Observer.
Experts and investors say any decrease in house prices in North Sinai is an indication of the amount of risk in the area. They say Sinai locals are capable of making use of low prices when it comes to buying property, as they can see the situation on the ground and this helps them take the right decision.
This presents a difficulty in determining the percentage of the decrease in the value of real estate investments in North Sinai following the recent incidents and in light of the undefined risk in the area, according to real estate expert Abdel-Meguid Gado. It is difficult to forecast when such incidents will be controlled and prevented, which might encourage investors to pump in capital, he says.
Gado pointed out that a halt to real estate investments reflected on the activities of other investments, namely industrial and tourist ventures, adding that real estate investments reflected a wish to establish communities based on industrial activities. Real estate investments represented 40 per cent of all investments, he said.
As for reports of opportunity seekers who are taking advantage of very low prices to purchase property and gain a profit later, the real estate expert said that in light of such conditions it was impossible for anyone not from Sinai to jump in, as Sinai residents were better aware of local conditions. People from outside Sinai could never do that under any circumstances, he stressed.
He added that real estate investment in South Sinai had also been affected but to a lesser degree than in North Sinai, which was the most restive area in Egypt.
Following the latest incidents in Sinai, the percentage of real estate investment will certainly drop to zero during Ramadan when there is a normal decrease in real estate movement, according to Alaa al-Saqti, who sits on the board of the Egyptian Federation of Investment Associations.
Saqti referred to the recent 50 per cent decrease in the real estate market in general, saying that real estate investment had stagnated by 100 per cent and forced down prices.
