This year has witnessed exceptional growth in the Egyptian real estate market, especially in terms of supply, with hundreds of projects being established and billions of investments being pumped, along with the opening of many new cities by the government in various places.
In this regard, homebuyers were the main indicator of how the market was going and heading to, for they are the main stakeholders in the market. Invest-Gate will give you a detailed review of the buyers’ trends in 2018 and what they are tending to do in the real estate market, especially with the economic changes taking place in the region.
Rent: A Mainstream Trend
With the current economic changes in Egypt putting more inflationary pressures on families’ budgets, renting has become one of the new trends that the real estate consumers go for as it gives them an opportunity to live in A+ compounds without paying the full price of the property, so that they can balance between having a good lifestyle and affordability.
An increase was also noticed in second-home units offered for rent as property owners have become in need for liquidity all times, so they offer the units they own for rent to generate the highest interest out of them.
Mazen Al Nimr, a freelance broker in his 30s, says “people’s need for properties will never end; however, their financial capabilities are not helping some of them to buy new homes; and thus renting properties has become a new way to live in a unit at an affordable cost,” noting that people who tended to rent this year were mainly newlyweds and newly established families.
Direct Sales: Residency Over Investment
The decades-long trend of reselling properties, where people prefer to own more than one unit and sell them when their value soars, has recently declined in Egypt with the increase of current real estate supply due to the growing number of new projects and new cities being established, bringing with them eased payment plans.
Economic conditions, along with the real estate tax law, have also affected buyers’ purchasing power, turning most of them from buying a property for investment purposes to owning it for residency.
Al Nimr reckons that the variety of units’ types offered by developers in different locations has turned buyers’ tendency towards owning branded new properties and buying them directly from the developer.
Second Homes: Higher Demand
Second homes are one of the main products that witnessed demand in the residential market during 2018 since Egyptians usually like to own a second home in coastal cities. Unlike some behaviors that have seen changes in 2018 due to financial constraints, owning a second home is a habit that Egyptian buyers still tend to stick to.
Al Nimr shows that the rate of demand on second homes in the current year was somehow higher than demand on primary homes.
Demand For New Cities: Not as Expected
On the contrary to all expectations, demand for new cities is not much as high as established ones, although the government is implementing a great number of new cities with new and exceptional opportunities
Al Nimr attributes this to the fact that established cities are already supplied with all utilities and services, however, he says that new cities are expected to see an increasing demand in 2019 when they are fully implemented.