Analysis: Greater Cairo residential market outlook
Savills Report finds that Egypt’s economy is expanding despite a global slowdown, resulting in a shift towards high-quality, fully-finished apartments in Greater Cairo’s residential property market
It is estimated that the current residential stock in Greater Cairo stands at approximately 7.1 Mn units2, with the bulk of the current stock concentrated across the Central Cairo micro-market. Apartments amount to roughly 93.2% of this supply in Central Cairo, while mixed-use developments account for 4.2%. Being the former city centre, most of the stock in Central Cairo takes the form of old, often, deteriorating buildings.
The Egyptian New Urban Communities Authority (NUCA), along with other governmental authorities, have ensured the availability of land to various private developers to execute new masterplan projects, signalling an increase in supply in the market. This has led to the development of various large mixed-use developments across both West Cairo and New Cairo, leading to a strong increase in the supply of Grade A residential developments.
The majority of Grade A units within West Cairo and New Cairo, which are currently estimated to be 69,400 units, is composed of new apartments spread over a number of prominent developments, such as Mivida by Emaar, Palm Hills New Cairo, and SODIC East-town, among others. In line with the supply, the demand for residential units has remained strong across Greater Cairo as well.
A large portion of the demand has been found to be generated by the domestic population, making a growing population a key factor in the growth of the residential sector. Whole buildings and stand-alone villa developments of good quality are also sought-after primarily by affluent and larger families. Apartments on the other hand, which are available through a mix of both private and public sector projects, are usually popular among young families and small investors, tracing back to ticket price, affordability, high quality finishing, and their accommodation of community facilities.
Residential Demand is expected to continue to increase in the coming years driven by population growth, which is forecast to increase at a CAGR of 1.4%, as well as the slight decrease of the average household size from 3.56 in 2020 to 3.46 in 2025.
The overall demand is expected to remain strong and resilient despite the impacts of COVID-19. In addition, demand is likely to remain concentrated across the mid-to-high end segment, making them a preferred investment choice for the top income category of the population, mainly for their good-quality services. Nevertheless, the market will still witness a surplus, as large inventory is being rolled out across multiple neighbourhoods and segments of the market
