New Nationality: Citizen of the Compound

About 20 years ago, I embarked on what was considered an adventure at the time. I bought property inside a gated residential community—what we now call a compound—in Sheikh Zayed City. Back then, the area was remote and mostly barren desert.

For many in Egypt’s upper-middle class, the traditional neighborhoods of Cairo, despite their vibrancy and sentimental value, had by the late 1980s and early 1990s become unbearably crowded, noisy, and polluted.

Anyone looking to provide a relatively better life for their family and children, or to secure their future in general, found a solution in moving to the city’s outskirts. There, they could enjoy more green space; a commodity that had all but disappeared in historic Cairo, overtaken by unsightly concrete and towering buildings.

To attract Egyptians returning from the Gulf—millions of whom had spent years toiling to afford an apartment amid a severe housing crisis—real estate developers offered units in gated communities in new areas such as Sheikh Zayed, 6 October and New Cairo. Long-term payment plans made the move feasible, and prices were relatively lower than those in Cairo’s upscale districts.

The half-billion summer resort

But today, after years of convincing a mobility-averse population to leave the family home and move to the outskirts, those initial incentives have all but vanished.

Property prices in these new cities and compounds have risen faster than in Cairo itself. At the same time, the installment periods have grown shorter compared with countries that offer mortgage systems with 20 - 30 year terms to encourage ownership instead of renting.

The relentless price hikes also reflect an attempt to attract high-income buyers, effectively excluding the majority of Egyptians with limited incomes. The actual proportions are uncertain, as the Central Agency for Public Mobilization and Statistics hasn’t published poverty indicators since 2020, when it estimated that 30% of the population lived below the poverty line.

Much has been written about Egypt’s widening class gap and the social effects of living in the bubbles of compounds, which have increasingly turned into isolated islands. In recent years, however, many have shown an even stronger appetite for seclusion, retreating into luxury homes while millions of Egyptians grapple with the consequences of currency flotation, mounting debt, and “national” projects that often fail to serve the majority.

As one of the unfortunate people who receive relentless calls from developers and sales reps, I’ve heard some truly outrageous and almost surreal prices quoted by agents. Not just because they’re so high, but because they are completely out of sync with Egypt’s crumbling economic reality, and they far exceed the actual value of the properties being offered.

The sales pitch typically starts with apartments priced at “just” 7 or 8 million pounds, followed by a “steal” of a villa starting at 18 and going up to 30 million pounds. “Act fast!” they say, because the remaining units are running fast.

I gathered from these pushy salespeople that the so-called “new cities” like New Cairo, Sheikh Zayed, 6 October, Rehab, El Shorouk, and Madinaty have now become old and crowded. They’re no longer a goal for those seeking exclusivity, and distance from the masses, even from aspiring middle-class people like me.

As a result, those seeking elite lifestyles now venture deeper into the desert, looking for luxury hotel-like compounds that offer every possible amenity such as expansive green spaces, lakes, clubs, golf courses, children’s playgrounds, international schools and universities, hospitals, and five-star hotels and shopping centers. Prices start at 50 million pounds and go as high as 200 million.

Alongside these Cairo homes are summer villas on the North Coast and in Ras El-Hekma, where construction hasn’t even begun. These apartments and villas, that would be occupied only for three months each year, sell for tens of millions. In one ad using the “roll up, roll up, cheap as chips” approach, a villa in a “posh” North Coast compound was listed for 70 million pounds. No wonder if others reach half a billion pounds.

Through a tourist’s eyes

Do the people paying these astronomical sums actually believe these properties are worth that much? Or is this just a game of asset shuffling within Egypt’s tiny ultra-wealthy class, who prefer to park their fortunes in fixed assets, even if those assets are grossly overvalued?

We’re talking about prices ranging from $1 million to $10 million—amounts that rival, or even greatly exceed, what it takes to buy a luxury home in USA or Europe. All while Egypt’s monthly minimum wage is just 7,000 pounds, or roughly $0.60  per hour, while in the US, the minimum wage is $7.25 an hour.

So are those prices a market response to supply and demand? Or is it a deliberate effort by this ultra-elite class to retreat further away from all other social strata—even those with relatively good incomes by current standards, but who remain “miserable paupers” in comparison?

This leads to a deeper question: Can the residents of these gated desert cities—who enjoy five-star services around the clock—still be considered part of society? Or have they adopted a new nationality: “citizens of the compound”?

This situation is deeply troubling; not just because of the risk of a housing bubble fueled by wildly inflated prices for concrete structures in the desert, but because the sons and daughters of the ultra-elite, supposedly the best-educated in the country, may grow up with no connection to their country outside their compound walls.

Cairo will feel distant to them—a place called by its English name "/ˈkaɪ.roʊ/"  instead of Al-Qahira, because they mostly speak English and they only visit the latter on folkloric or exotic field trips, viewing it through the eyes of a tourist, not a native.

Stand-alone villa for just 200 million? What a bargain!