For Mostafa Samy, buying a home in New Cairo was meant to be a three-year journey to ownership. Signing his contract in 2020 under a clear developer timetable, Samy faithfully remitted payments until he had paid approximately 4 million Egyptian pounds ($80,000), representing 80% of the unit’s 5 million pound price tag.
Yet three years past his agreed delivery date, construction has ground to a complete halt following years of sluggish progress, even as the developer continues to demand monthly installment payments, he explained to Al Manassa.
Samy’s predicament is far from unique. Across Egypt’s residential expansion zones, homebuyers are confronting a system that leaves them financially locked into stalled developments while bearing the brunt of developer distress.
In New Sheikh Zayed, Karim Hamdy faces a similar gridlock after watching construction crawl over four years. His agreed January 2025 delivery date came and went without physical progress or clear answers from the developer.
“Our problem is that we paid our money and kept up with the installments, but the project isn’t moving at the pace we were promised,” Hamdy told Al Manassa. “Every so often we hear about a new deadline, but there’s nothing on the ground that lets us know when we’ll actually receive our units. If the company told us the project needs another two or three years, at least we’d know where we stand.”
For others, formal legal remedies have yielded little relief. Mahmoud Samir, a homebuyer in the same New Sheikh Zayed project, turned to the judicial system after failing to reach a resolution to protect his rights.
While earlier phases of the project were delivered on schedule, including a unit purchased by Samir’s brother in the first phase, Samir’s fourth-phase unit remains three years late despite his uninterrupted installment payments. The resulting legal process has dragged on with minimal progress.
A compounding economic crisis
The root causes of this widespread stalled construction stretch back through several years of mounting macroeconomic pressure and shifting state policy.
In 2021, President Abdel Fattah El-Sisi ordered measures to regulate off-plan unit sales, requiring developers to complete 30% of construction before offering units to the public in order to prove operational capacity and seriousness.
However, financial pressures on developers accelerated rapidly. By November 2023, approximately 130 of the 400 real estate companies operating in the New Administrative Capital were in severe financial distress as project costs surged.
The sector suffered its heaviest blow when the Egyptian pound lost more than 60% of its value following exchange-rate liberalization in March 2024. The currency drop sent building-material costs and overall construction expenses skyrocketing.
By early 2025, tension spilled over into operational disputes between real estate developers and construction companies. Contractors demanded higher contract payments to absorb cumulative spikes in inflation, interest rates, and the official dollar exchange rate, further slowing work on active sites.
Market realities vs. buyer protections
Developers argue that external economic shocks made original project models unviable. Speaking to Al Manassa on condition of anonymity, a board member of the Real Estate Development Chamber attributed the market breakdown primarily to state macroeconomic decisions.
“A developer conducts a feasibility study based on a certain construction cost, then after signing contracts with customers is surprised by a government decision that sends building-material prices sky high,” the source said. “Costs rise, profits shrink and sometimes turn into losses.”
Industry experts, however, stress that regulators must separate temporary financial distress from long-term project failure. Fathallah Fawzy, vice chairman of the Egyptian Businessmen's Association and head of its Real Estate Development Committee, noted that project pace can be disrupted by fluctuations in costs, designs, permits, or utility connections.
“But when the slowdown continues for long periods with no clear ability to restore the pace of construction, that raises questions about whether the developer can complete the project and how the company should be dealt with to protect investors’ rights,” Fawzy told Al Manassa.
Fawzy argued that regulators should evaluate developers by comparing actual construction progress against schedules, sales, collections, financial liabilities, and remaining funding capacity. Such evaluations would clarify whether a developer needs financial restructuring, a new equity partner, or direct regulatory intervention.
To protect consumer capital before projects collapse entirely, experts and advocates argue that the market requires fundamental structural overhaul.
The Real Estate Development Chamber board member emphasized that safeguarding buyers requires detecting troubled developments before site work freezes completely. He advocated for mandating escrow accounts, where buyers’ funds are deposited into dedicated project accounts and released strictly as verified construction milestones are met.
This mechanism ensures that customer capital is funneled directly into the physical units they purchased rather than diverted elsewhere.
Alongside financial safeguards, Fawzy proposed establishing a tiered rating system that restricts the scale and number of projects developers can launch based on their technical and financial track records. “A developer with a limited track record and limited financial capacity should not necessarily be allowed to undertake dozens of large projects and collect billions of pounds from customers,” Fawzy said, stressing that sales permissions must be anchored to proven operational capability.
Finally, industry figures pointed to legal and administrative mechanisms needed to resolve buyer grievances quickly. Re-activating the national developers registry and establishing specialized real estate courts would expedite disputes over delayed deliveries, contract cancellations, and compensation, sparing buyers who have remitted most of their unit's price from spending years trapped in standard litigation.
State intervention and accountability
The ongoing crisis culminated in direct executive action when President El-Sisi ordered a comprehensive nationwide review of real estate developments on Monday, establishing a dedicated committee to inspect construction, enforce buyer contracts, and hold noncompliant developers accountable.
According to a Ministry of Housing source speaking to Al Manassa on condition of anonymity, the ministry is compiling a complete inventory of under-construction projects across all governorates based on municipal approvals. Proposed ministry representatives on the panel include Housing Minister Randa El-Menshawy, New Urban Communities Authority Vice President Walid Abbas, and New Administrative Capital Company Chairman Khaled Abbas.
The committee is empowered to grant final completion extensions to delayed developers facing exceptional circumstances, establish clear legal frameworks for buyer contract compliance, or revoke land allocations from developers who fail to meet obligations.
