A few weeks ago, what has become known in Egypt as Sahel season has concluded. The three months of summer are when those who own properties along Egypt’s North Coast bid the city a temporary farewell, spending the hot months along the coast’s renowned sandy beaches and pristine waters.
The weather, however, isn’t the only thing that’s hot in Sahel during summer; the prices are too. Whether it’s rental or purchase, prices in Sahel have been on a rocket ship for as long as one can remember, driven by the incredibly high demand during summer and limited housing on offering.
Savills, a UK real estate service provider that’s been operating in Egypt for three years, has recently released a report spotlighting prices in the North Coast for 2021. Tamer Elfiky, head of Marketing and Business Development at Savills Middle East, speaks exclusively to Business Forward as we breakdown the report.
“When we look at the North Coast, every summer, the rest of the real estate market shuts up for a minute, and everyone is listening to the market there,” says Elfiky. “We saw that last year and took it upon us to focus on the North Coast to give the industry information as to what’s happening there; what kind of trends; where the market is going; and what kind of prices people are to expect.”
Tamer Elfiky, head of Head of Marketing & Business Development at Savills Middle East
As most Sahelites know by instinct, Sahel is divided up into two broad market segments, namely old Sahel, up until Marina, and new Sahel, after Marina. This segmentation is evident in the Savills report, however when it comes to prices, it is divided up into three main segments, not two.
“If you look at Sahel now, it’s segmented into old Sahel, then Sidi Abdelrahman, and then new Sahel,” explains Elfiky. “So it’s like the past, present, and future, and you can actually see the difference in pricings in each of those areas.”
Relying chiefly on secondary market research and sometimes going on-ground themselves, Savills
managed to determine pricing per meter in different compounds along the coast, which further highlighted and proved the aforementioned segmentation.
Starting in Sidi Krer, prices have been found to reach EGP 6,500 per meter for chalets, and EGP 5490 per meter for villas, increasing exponentially until reaching EGP 14,470 per meter in Marina for chalets, and 13,890 per meter for villas. New Sahel, unofficially thought to start in the area after Marina and New Alamein city, has seen prices climb to EGP 37,860 per meter in Telal for chalets, and 38,450 per meter for villas.
“Up until last year, rent prices in Sahel were comparable to the rent prices in Southern France, and in those three months of summer, you had prices that went up to EGP 20 and 30 thousand per day,” exclaims Elfiky.
But something changed over the past few years, and that thing is called New Alamein city. While today Sahel is largely made up of compounds that aren’t accessible to the general public, it’s slowly getting a sprawling city at its heart, with universities, culture centers, government buildings, and skyscrapers; New Alamein city – inaugurated by President Abdelfattah El Sisi in March 2018.
Though still not fully functional, New Alamein is set to have two universities become operational this year, with students flocking to the city and, unlike previous years, making it a year-round destination for them. Businesses and governments are to soon follow, with twenty-five skyscrapers expected to come online in the next few years. This development has somehow put the brakes on Sahel’s price madness.
“The trend is that Sahel is slowly moving from a seasonal destination to an all-year-round destination,” explains Elfiky. “You’re looking at this being pushed through New Alamein city; you already have universities that are starting this year; you have construction that is almost complete in a lot of their projects; you have government buildings being complete; you have hotels opening as of this year. You also have a lot of community and businesses moving into that area, where people [will] live on the beach front all year round.”
That, Elfiky elaborates, has helped stabilize prices in Sahel as homeowners realize their properties have the potential to attract renters and buyers all year-round, not just in summer. Also, with more and more people working from home due to COVID-19 , more people are willingly staying in Sahel beyond summer as they continue their work with a view of the Mediterranean, miles away from the congestion and pollution of Cairo.
Due to Sahel’s unique structure of compounds and gated communities, it had remained a sort of a well-kept secret among Egyptians, rarely attracting tourists or foreign investors like popular Red Sea resorts of Sharm El Sheikh and Hurghada do. Could that soon be shifting?
“I think Sahel as a concept will eventually have an international appeal, however for the time being it’s a niche community, not like the Red Sea that’s famous for its beaches and diving,” explains Elfiky. “It’s more of an Egyptian getaway and Egyptians have a special connection to Sahel that foreigners don’t necessarily get or have this emotional pull towards.”
“However, we’ve seen a couple of destinations that have built their attraction around some international exposure, places like Almaza, Ghazala, and Marsa Matrouh, which were originally focused on international tourists,” adds Elfiky. “So unless they have really pristine beaches like the ones in Almaza, there’s no pull or touristic relevance to Sahel yet.”
But New Alamein also has the potential to turn that around, declares Elfiky, if companies that come to the city attract an international audience. To elaborate on that, Elfiky compared the project to Maadi, an affluent Cairo suburb favored by much of the city’s expat population.
“The reason Maadi is attractive to foreigners is because of all the British and American oil companies that came in in the 1970s, and then international schools capitalized on the foreigners [and opened up branches there], so it just built this kind of cycle.”
“So it depends on the operators New Alamein gets for the businesses, hotels, and what kind of services they offer. It can definitely pull in a lot of international appeal; you have skyscrapers overlooking the Mediterranean beach, and that’s something that we don’t see much in northern Africa,” concludes Elfiky.
