The Egyptian government, being the country’s largest landowner, is benefitting from the housing crisis, characterized by housing prices going beyond citizen’s income, says a housing expert.
The Egyptian government was major among forces behind the promotion of “an unregulated property market”, Yahia Shawkat, a housing policy researcher and former consultant at UN-Habitat, wrote in an article on the website of the US-based Middle East Institute.
“When prime ministerial decree 350/2007 removed almost all restrictions on foreign companies and individuals buying property in Egypt, prices spiked 116 percent overnight in the suburb-like ‘new cities’ around Cairo that New Urban Communities Authority administers and where most land speculation occurs,” according to Shawkat.
“The property boom that ensued from 2007 until the January 2011 revolution saw land prices there balloon at a rate of 148 percent per year,” he added.
Against the skyrocketing prices since 2007, Shawkat highlights, “according to the national census authority, average incomes increased only 1 percent per year between 2008/2009 and 2012/2013. At the same time, poverty has increased, with 26 percent of the population currently living below the national poverty line.”
Shawkat maintains that the income-price disparity shows Egypt has one of the most unequal housing markets in the world. He argues that Egypt’s economic strategy for the next 15 years, which voices housing projects as a vital component, focuses on production rather than affordability and means to avert “precipitous rise in prices”.