Mohamed Idris: The 7.25% interest rate cut will give a strong boost to the real estate sector in 2026
Engineer Mohamed Idris, Chairman of the Board of Directors of Mabani Idris Company, affirmed that 2025 marked a positive turning point in monetary policy, witnessing a cumulative reduction in interest rates of approximately 7.25%. This represents a boost for the real estate sector and an incentive for developers.
Idris explained that the Central Bank of Egypt's recent decision to reduce interest rates by 1% not only has a direct financial impact but also sends strong reassuring messages to local and foreign investors. It reflects a clear direction towards supporting economic growth and stimulating investment, especially given the positive expectations of continued monetary easing throughout 2026.
He pointed out that the market is currently experiencing a state of anticipation and expectation for further interest rate reductions, given their crucial role in increasing investment flows and encouraging companies to expand and implement new projects by obtaining bank financing at lower interest rates. This, in turn, accelerates the pace of expansion plans and enhances employment rates.
He added that the real estate sector is among the sectors that benefit most from the reduction in bank interest rates, explaining that with the decline in returns on savings, savers are turning to alternative investment vehicles characterized by safety and stability, with real estate being a prime example. This is due to its ability to preserve the value of money in the face of inflation, in addition to achieving increasing and stable returns in the medium and long term.
Idris emphasized that the reduction in interest rates also directly impacts the financial structure of real estate projects, as it contributes to reducing financing costs and absorbing some of the burdens borne by developers, primarily various fees and the continuous rise in the prices of building materials, energy, and services. He explained that financing costs, before the interest rate cuts, had reached approximately 30% of the total project cost, which placed significant pressure on developers and affected unit pricing and launch plans.
He emphasized that continued interest rate cuts will help developers restructure their costs and improve profit margins, which will positively impact the market as a whole, whether through increased supply, diversification of real estate products, or the introduction of more flexible payment plans to suit different customer segments.
Engineer Mohamed Idris predicted a strong start for the real estate sector in 2026, with continued interest rate cuts and the implementation of supportive measures for the market.
The Central Bank of Egypt decided to reduce the interest rate by 1% during its eighth and final Monetary Policy Committee meeting of 2025, bringing the deposit rate to 20% and the lending rate to 21%. This move reflects the government's continued commitment to supporting economic activity and stimulating investment.
Thus, the total interest rate cuts since the beginning of 2025 have reached 7.25%, implemented in five separate meetings: 2.25% in April, 1% in May, 2% in August, 1% in October, and 1% at the most recent meeting.