Egypt is a good lesson in why it is important to distinguish between nominal and real house prices. Extraordinarily high inflation (29% and rising) caused by floating the currency in November 2016 means that 22.86% nominal house prices increases actually disguise real house prices declines of 5.32%!
Egypt’s economy grew by 4.3% in 2016, the highest growth in 6 years, on the back of strong private consumption and investment in energy, real estate and infrastructure. The economy is expected to grow by 3.5% this year and by another 4.5% in 2018.
Analysis: a property boom is coming.
Egypt’s housing market is widely expected to rise strongly in value in coming years. Why? Because inflation is eating Egyptians’ savings by 29% per annum. Even if property is also falling in value (in real terms), it is falling less than cash. So Egypt’s moneyed classes are buying property. Especially as it is hard to get money out of the country. And there are excellent rental yields in Cairo.