Billionaire property developer Hisham Talaat Moustafa warns Egypt's new real estate fees could push project costs up by 15 percent

New fees introduced by Egypt's New Urban Communities Authority are testing the resilience of the country's property sector, with developers warning that charges reaching EGP 1,000 per square metre could push total project costs up by as much as 15 percent on top of already elevated expenses for construction materials, energy and financing.

The fees, announced by NUCA, apply to developers operating within Egypt's new urban communities, which house a growing proportion of the country's premium residential and mixed-use development activity. Real estate accounts for more than 20 percent of Egypt's GDP, and the sector has been the primary vehicle through which Gulf investors and wealthy Egyptians have parked capital in recent years. The new levy arrives at a moment when the industry is already absorbing sharp cost increases across concrete, steel and energy inputs.

Hisham Talaat Moustafa, the CEO and managing director of Talaat Moustafa Group Holding, has been among the voices tracking the pressure on prices. He has previously told Egyptian media that prices in the sector are unlikely to decline, arguing that land costs, construction inflation and sustained demand from local buyers, Egyptians abroad and Gulf investors together prevent any meaningful softening. He said earlier this year that ready-to-deliver units represent an opportunity that will not repeat, because new projects are being built at higher cost. That argument now has to contend with an additional fee layer that developers say makes the maths harder.

Talaat Moustafa Group is Egypt's largest listed real estate developer and had a record year in 2025, posting contractual sales of 8 billion dollars and a net profit of 381 million dollars, up 43 percent year on year. Forbes Middle East ranked TMG at the top of its list of the 50 most valuable Egyptian companies by market capitalization, based on January 2026 data.

Earlier this month, the group announced plans for a new mixed-use city called The Spine, to be developed near Cairo in partnership with the National Bank of Egypt at a total investment value of 1.4 trillion Egyptian pounds, approximately 27 billion dollars. The project will span more than 2 million square meters and feature 165 residential, business and commercial towers, structured as a Special Investment Zone adjacent to the group's existing Madinaty development.

Industry observers say the effectiveness of the new NUCA fees will depend on how they are implemented and whether regulators calibrate the rate to balance revenue collection against the risk of slowing new supply. Egypt has a structural housing shortage, with annual demand for new units estimated at more than 900,000 per year driven by population growth and household formation. Supply constraints are likely to keep prices elevated regardless of the fee regime. The more immediate question is how the additional cost burden is distributed between developers and buyers in a market where installment plans rather than bank financing dominate purchasing.