A rising trend in the Egyptian real estate market is newlyweds renting apartments for a number of reasons that surpass the conventional reasons such as budget constraints and inability to afford buying a housing unit. Invest-Gate examines Cairo’s rent market with its current trends and status.
It has become apparent in Egypt today that more newlyweds start their new lives with their significant others renting units because of the increased cost of living; and also because they have purchased residential units with delivery in five or six years time.
Newlyweds, commonly, have to wait for the districts they purchased their units in, specifically new cities and districts, to be livable and house all necessary services.
Residential rent in Egypt offers investment returns of an average of 8% to 10%, a percentage that is higher than some countries in Europe, as most brokers across the country confirm. However, this does not mean that everyone wants to get on board with the renting trend. Estimates place uninhabited units in Egypt at over 12 mn housing units.
“Owners do not like to rent their properties; it is too much hassle and they do not want to encounter potential troubles with renters,” Ahmed Abdel-Fattah, development Manager at Aqarmap tells Invest-Gate.
The current bank interests averaging 16% offer a more financial incentive than renting property. As to the supply and demand in the rent market, in some areas, according to Abdel-Fattah, such as Mohandseen, “it is difficult to resell residential units there and the properties’ prices do not increase significantly; however, rents are very high due to international companies that rent units for their employees.”
The same holds true for Maadi, which is a hub for petroleum companies and many foreign workers, he elaborates.
A high demand does not always mean an increase in prices, however.
“There is a very high demand on rent in New Cairo’s El-Rehab and Madinaty residential compounds but the supply is plenty so the rent prices are low,” Abdel-Fattah reveals, adding that people, who work in New Cairo and cannot afford the higher price range of the Fifth Settlement so they rent in Madinaty instead.
As to trends affecting the rental prices, rents tend to peak in summer, according to Abdel-Fattah, citing tourists inflows.
“This does not affect the rent prices for long-term rentals,” he elaborates “however, it limits the options available in the market.”