Egypt’s real estate sector is shifting decisively from regulatory debate to enforcement, as government authorities, parliament, and market stakeholders converge on the activation of escrow accounts as a central mechanism to restore discipline, protect buyers, and curb project delays.
The renewed momentum follows mounting complaints over delayed unit deliveries and instances of financial mismanagement in some developments, raising broader concerns about market governance, investor protection, and the sustainability of off-plan sales. Against this backdrop, escrow accounts are increasingly viewed as the cornerstone of a new regulatory phase for the sector—one focused on accountability rather than voluntary compliance.
Government Steps Up Oversight
Prime Minister Mostafa Madbouly has repeatedly stressed, during cabinet meetings with the Real Estate Market Regulation Committee—which includes the Minister of Housing and the Chairperson of the New Urban Communities Authority (NUCA)—that the state will not tolerate violations of rules governing off-plan sales.
According to statements from the Cabinet’s Media Office, the government is closely monitoring the enforcement of regulations obliging developers to open a dedicated escrow bank account for each project. Withdrawals from these accounts are tied to certified construction progress reports, ensuring that buyers’ funds are used exclusively for execution and building works.
In December 2025, Walid Abbas, Vice Chairperson of NUCA for Planning and Projects, said the authority had already begun reviewing developers’ bank statements to ensure full financial separation between projects operated by the same company, in line with Cabinet Decision No. 2184.
Earlier, in October 2025, Fathallah Fawzy, Head of the Real Estate Development Committee at the Egyptian Businessmen’s Association, warned that the delay in activating escrow accounts for nearly three years had contributed directly to current project distress cases. He called for an urgent transition from what he described as “paper-based decisions” to full on-ground implementation.
Parliament Pushes for Mandatory System
The Egyptian Senate has also entered the debate. In November 2025, lawmakers submitted a memorandum proposing a mandatory escrow system for every real estate project, with provisions allowing funds to be frozen in cases of severe developer default and redirected to complete construction through an alternative developer.
The proposal further calls for linking escrow accounts to a unified national digital platform, enabling buyers, regulators, and the Central Bank to track fund flows and construction progress in real time—introducing an unprecedented level of transparency to the sector.
Private Sector Initiatives and Pilot Models
From the private sector, Ahmed Elbatrawy, CEO of the Official Egyptian Real Estate Platform, revealed in December 2025 a proposal requiring developers to deposit 30% of a project’s total value in cash into escrow accounts prior to launching sales, as proof of financial solvency and seriousness.
In parallel, Farida Developments announced the actual implementation of an escrow system in cooperation with a major state-owned bank, positioning the initiative as a pilot for broader plans to transform real estate units into tradable instruments within a proposed real estate exchange.
Developers Urge Cost Considerations
Despite broad agreement on the need for regulation, concerns remain among developers. The Real Estate Development Chamber at the Federation of Egyptian Industries has warned that escrow accounts could increase administrative burdens and unit prices due to banking fees.
Executive Director Osama Saad El-Din said developers support market organisation but called for closer coordination with financial institutions to mitigate cost pressures and avoid passing additional expenses on to end buyers.
Business development consultant Abdelrahman Khalil argued that a strong and effective regulatory authority would help establish fair competition by rewarding compliant developers while forcing non-serious players to either correct their positions or exit the market.
He described escrow accounts as essential for safeguarding project funds and boosting investor confidence—particularly for foreign investors whose feasibility studies are often undermined by regulatory uncertainty.
Khalil added that the main challenges lie in cultural resistance to oversight and weak enforcement, rather than the absence of legislation. On legacy distressed projects, he stressed that new regulations should focus on preventing future crises, while existing cases should be resolved individually through current judicial mechanisms, without retroactive application of new rules.
Drawing comparisons with international models such as Dubai’s Real Estate Regulatory Agency (RERA), Khalil emphasised the need to adapt best practices to Egypt’s market size, financing structure, and development cycles.
From Advocacy to Enforcement
Between 2025 and 2026, a clear national consensus has emerged: escrow accounts are no longer optional but are becoming the primary tool to address delivery delays and restore trust in Egypt’s real estate market. The current phase marks a shift from advocating the concept to enforcing its mechanisms—whether through a proposed independent real estate regulator or a more empowered developers’ union—signalling a structural transformation in how the sector is governed.
