Egypt Daily News – Yassin Mansour, Chairman and CEO of Palm Hills Developments, expects real estate prices to rise this year by between 10% and 12%. He noted that the slowdown in price increases will not negatively affect companies’ profitability, as they rely on financial activities to fund clients.
Mansour said that in certain past periods, the real estate market witnessed price increases of up to 80% or 90%, which he described as abnormal and unhealthy for any economic activity. He emphasized that his company follows a more balanced pricing strategy.
He added, “We expect this year’s increase to be between 10% and 12%, a rate that takes into account the current inflation level of around 14% to 15%. As a company, we always aim for price increases to equal about 70% of the inflation rate, to maintain customers’ purchasing power and competitiveness in the market.”
He pointed out that unit prices vary from one project to another. “The initial phases of any project are usually offered at lower prices than later phases, in order to encourage early buyers and ensure returns for them. Therefore, the prices we start with are not high, they are highly competitive. We hope to complete the initial phases quickly and then move to the later ones,” he explained.
Regarding the impact of the slower price growth on real estate company profits, Mansour stressed that this “will not negatively affect profitability.” He clarified that real estate developers engage in two main activities: property development and real estate financing. “We sell units over payment periods that extend up to 8 or 10 years, while delivery happens in 4 years or less. This means we bear part of the financing, which makes rising interest rates a real challenge for us,” he said.
He continued, “High interest rates negatively affect real estate developers. That’s why we hope they gradually decrease, especially since Egypt is among the highest in the world in terms of real interest rates (the interest rate after subtracting inflation). This is an abnormal situation, even though we understand that the interest rate hikes were in response to specific economic conditions and based on the Central Bank’s Monetary Policy Committee’s assessments.”
Mansour emphasized that persistently high real interest rates lead to sluggish demand across markets — not just in real estate, but also in sectors like cars and various industries, as people prefer to deposit money in banks rather than invest it. This, in turn, reflects negatively on the broader economy.
In the same context, Mansour predicted that sales from the first phase of the “Jaryan” project would reach about 75 billion Egyptian pounds, noting that unit delivery will be completed within 4 years.
Mansour also mentioned that the Nile River will be part of the project by next year, and that the political leadership is pushing for the entire project to be completed in just 3 years.
He added that the company will receive a percentage of the sales for handling marketing operations, while the Future of Egypt Authority will receive all revenues. Palm Hills’ share of the project will be less than 10%.
