The Egyptian real estate market is thriving despite the country's overall economic situation, officials and experts told Al-Shorfa.
They attributed this vitality in part to the growing need for housing as the population expands, adding that some developers also are hurrying to finish projects before the new tax law takes effect.
Construction activity has risen by 60% at the end of 2012 in comparison with the same period in 2011, said Maged Omran of the Ministry of Housing's technical inspection division.
"Construction activity is certainly at an almost unprecedented high level in the present period," he told Al-Shorfa.
Building is concentrated in Cairo's residential areas and near administrative centres in other provinces, Omran said.
Random housing construction activity also is taking place, where contractors first begin construction and later reach legal settlements and obtain the necessary licenses and utilities, such as electricity, water and plumbing, he said.
"There are about 40 million real estate units registered with official government agencies in Egypt, varying between residential, commercial, tourism and industrial units," Omran said. "The actual number, especially of residential units, however, exceeds the official figure by at least 30%."
The majority of buildings currently under construction are residential due to a widening gap between supply and demand, he said.
"Cairo, for example, is designed and planned to accommodate 5 million people, but the latest figures put the population of Cairo at upwards of 22 million, and residential building construction activity is in a semi-constant state of prosperity as a result," he said.
Egypt needs 800,000 new units a year, while annual production is estimated at no more than 200,000 units, thus making real estate development an urgent necessity, he said.
As a result, private sector participation through the build-operate-transfer system -- a form of project financing through which a private company builds and operates a facility, then turns it over to the government – has become crucial, Omran said.
The Housing Ministry's monitoring agencies conduct field inspections of buildings almost daily, and act on reported violations in co-operation with security services, tearing down any construction deemed to pose a potential hazard, he said.
There also is a plan to overhaul these monitoring agencies in favour of technology centres, particularly in newer cities, in order to track infringements and violations in real time, he added.
Real estate developer Farouq Abdul Latif attributed the "current boom in the real estate sector" to several factors, including the fact that many developers are hurrying to complete their projects before the new tax law is issued.
Housing prices depend on location, access to basic services, and proximity to public roads and metro stations, he added.
"The price of a basic medium-sized apartment in an acceptable area, for example, does not exceed 200,000 Egyptian pounds ($30,800)," he said, adding that developers seek to entice buyers with long-term instalment payment plans.
Economist Mohammed Ezzat, a legal advisor for several real estate development companies, said large companies typically do not enter the market at a time like this, preferring to wait until economic and political conditions settle down, particularly since their projects are large, costly and require official plans and licenses.
Medium- and small-scale investors, however, use the real estate market "as a safe haven during crises to preserve [their] capital", he said. "This is why construction activity picked up during and after the revolution and is still going strong despite the fact other sectors are in a recession."
The smaller-scale investor "believes he will not lose his money, even if it has to sit idle for a short period until the markets begin moving again", he said.
The real estate market injects money into the Egyptian economy and is a market mainstay, Ezzat said. It is linked to more than 100 other sectors, creates thousands of jobs and stimulates market activity through the trade of building materials such as iron, cement, paint, tiles and ceramics, in addition to furniture and electrical appliances.
"The best evidence of the real estate market's recovery is its performance on the Egyptian stock exchange, where it recorded the third highest gain among all sectors at 78%, and ranked third in terms of trading volume with 5.4 billion shares traded at a total value of 20.2 billion pounds ($3.1 billion)," he said.