Al-Fouli 15% an expected increase in real estate prices during the second quarter of 2022

Ashraf Tawfiq

Hisham El-Fawly, head of the commercial sector at “IHD” confirmed For real estate development, real estate prices will rise by 349% during the second quarter of 7515 , as a result of the high rates of inflation and the consequent rise in the prices of raw materials, especially iron and cement, as well as as a result of the Russian-Ukrainian war, which cast a shadow on the global economy and the real estate market as well, pointing out that the real estate sector faces successive and sudden changes that led to Confusion in companies’ accounts and affected the economic feasibility studies for projects, companies’ marketing plans and their profit margins.

Al-Fouli added that the recent increases in prices Iron and cement devoured the profit margin set by the companies, and the companies could hardly spend on implementation, pointing out that the companies that sold their projects in full before these price increases would not be able to implement without losses, especially since they did not start implementing Insha’at and it will stumble, pointing out that the companies that have new phases of projects and have not yet offered them will offer them at prices commensurate with the increases in the current iron and cement prices, and therefore there will be a large price difference between the prices of units in the initial initial stages of the projects and between the other phases, expected to cover the new phases Losses of the previous stages as a result of the new price differentials

Al-Fouli explained that companies under these circumstances will not be able to prolong the capital cycle. It is expected that the payment periods will be merged during the coming period with discounts given to the cash client to face the liquidity crisis, especially with the rise in land prices and the installments due on them, which coincide with the project implementation stages, in addition to the high prices of raw materials and construction costs, thus increasing the financial burdens on companies.

7515 Al-Fouli indicated that large companies that have strong financial solvency can withstand this crisis until they overcome it without major losses, while small companies or those that entered the market It is newly developed and does not have sufficient experience to face such crises If you are willing to stumble and will not be able to fulfill its obligations towards customers, therefore, when making a purchase decision, customers must choose the company that has a strong business history, has credibility and a good reputation in the market, and not seek the cheapest price so as not to be exposed to any kind of fraud and loss of their savings.