Egypt now Mena's third-largest construction market with $565.5bn pipeline

With $120bn in projects currently under execution, nation trails Saudi Arabia and UAE

New buildings sprouting up in New Alamein City on the North Coast of Egypt, 260km from Cairo. EPA

Egypt’s construction market has grown into one of the largest in the Middle East and North Africa, with future projects valued at $565.5 billion, a report has found.

A report by global property consultancy Knight Frank identifies Egypt as the third-largest construction market in the region, following Saudi Arabia and the UAE, with $120 billion in projects currently under execution.

The annual report, Egypt’s Construction Landscape 2025, outlines a market shaped by steady activity and large-scale infrastructure developments.

Residential and commercial real estate projects dominate contract awards, but mega-projects in energy, transport and other sectors have also played a significant role in the country's construction output over the past decade.

According to Knight Frank, 51 per cent of projects are still in the study phase, while 39 per cent are in the design phase.

This means that while opportunities in planning, feasibility studies and pre-construction services are significant, most projects are not yet ready for groundbreaking.

While Egypt’s construction boom has historically been driven by government-backed infrastructure projects such as the New Administrative Capital, the Suez Canal expansion and the many satellite cities built by the state to accommodate the growing population, private-sector developers are now playing a more prominent role.

Tightened public spending, a condition of Egypt’s loan programme with the International Monetary Fund has made more room for private-sector investment in housing, office spaces and coastal developments, a report from the Egyptian Chambers of Commerce said.

Tourism-related construction has also grown, with developers targeting high-demand areas such as the Red Sea, North Coast and New Alamein.

These projects are catering to domestic buyers and Egyptians living abroad, who now account for a significant share of real estate demand, the report said.

Despite the sector’s growth, rising construction and input costs remain a challenge. Inflation, volatile exchange rates and reliance on imported materials have led to higher property prices.

According to industry estimates, prices for residential and commercial properties could rise by as much as 30 per cent this year on the back of high inflation, rising production costs and interest rates, which the central bank has kept high to reduce inflation.

Knight Frank’s report emphasises the long-term potential of Egypt’s construction market, particularly as the country continues to and expand its urban infrastructure.

However, with 90 per cent of future projects still in early stages, the pace of development will depend on economic stability, foreign investment and mitigating the cost of imports.