Real Estate in Greater Cairo, where to??

We received many questions about the expectations and directions of the real estate market in Egypt during the current year, so we decided to briefly present and share LOTUS Management’s point of view and we welcome the comments of everybody.

There are two direct results for floating the Egyptian pound’s Exchange rate; the first is an increase in the cost of construction, materials, finishes, supplies and equipment; the second is the effect of the change in the purchasing power/ability to buy or rent the different types of properties, which we will discuss in more details.

The increase in the cost of owning or renting a property without a similar increase in the purchasing power will directly result in weakness in demand. The weakness in demand will lead to a slight temporary decrease or stability of prices for the coming months as most of the real estate owners do not have financial leverage and are keeping the assets as long term investments and safe heaven against devaluation. They were capable of receiving decent appreciation returns without the need to rent the properties. With prices stagnation and limited appreciation, if any, Owners will pushed to consider seriously renting their properties to maintain the growth of the value of the owned assets.

Current and future tenants will benefit from this direction with the increase in the number of offered units. They will more opportunities to choose from. The abundance of properties offered for rent will attract more small families and youth to rent instead of buying, and will force the property owners to pay more attention to quality.

We believe that we will have a win-win situation. Tenants for residential, retail and commercial properties, especially in greater Cairo, will find more opportunities; and property owners will be able to realize more profits on their investments. Paying attention to the mechanisms and rules of renting and encouraging it is strongly needed in the coming period.