This thesis analyzes the real estate sector in Egypt. The thesis attempts to evaluate determinants of housing investment in light of the recent economic shocks within the Egyptian economy. This analysis is done using the mixed method approach of qualitative and quantitative methods. The quantitative methods component examines the effect of monetary policy on housing investment in Egypt using data on real estate stock market index, inflation, interest rates and money supply. The qualitative approach addresses the gap between the supply and demand for housing. This gap is fulfilled by the real estate developers in the Egyptian market. The findings from the quantitative analysis show a significant and positive effect of the monetary policy on the real estate sector, which matches the results from the literature that the real estate sector in Egypt is exposed to the dynamics happening in the monetary policy, especially the change in money supply within the economy. The qualitative data highlights the risks of having a housing bubble in the market as a result of the growing presence of builder-provided credit. The results from the qualitative approach reflected that there is a risk from the financial market. This risk is not coming directly from the banks, however, it is coming from the gap created in the financial market between the demand for mortgages and the legal supply of it from the banking sector. The analysis explains that the real estate developers stepped in to replace the role of the banks and sell the units with easier credit facility terms, with no risk assessment of the buyer. This reflects the risk of accessing credit facility with poor quality of lending that increases the risks within the real estate sector.
Public Policy & Administration Department
MA in Public Policy
Date of Award
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(2018).The dynamics of the real estate sector in Egypt: Is there a risk of having a housing bubble? [Master’s thesis, the American University in Cairo]. AUC Knowledge Fountain.
Lymouna, Rana Hamdy. The dynamics of the real estate sector in Egypt: Is there a risk of having a housing bubble?. 2018. American University in Cairo, Master's thesis. AUC Knowledge Fountain.