There has been an improvement in the way the Cairo real estate market has performed during the first three months of 2015, put down to enhanced confidence and a desire to invest which has been helped by the recent economic and political stability.
International property investment firms have carried out analysis that shows that the increase in confidence is shown by the new development known as Cairo Capital which will be an extension of Cairo but will help to move the focus of the city further to the east.
The report highlights that there has been an increase in residential sales prices throughout Cairo during the first quarter of 2015 which includes an increase in rental prices for offices in New Cairo with retail rental costs slowly moving upwards. There has also been an improvement in the hotel sector with tourist numbers increasing and occupancy rates getting better.
The foreign investment that has made its way into Egypt is likely to continue benefiting the tourism sector and the real estate market and this was proven at the recent Economic Summit in Sharm El Sheikh in March of this year.
The report shows that a recovery is underway in the Cairo residential market as sales figures have improved as a result of the economy recovering and political stability. Throughout all areas, the sale prices of apartments and villas increased and many developments have a low number of units left which has seen them increase their prices accordingly.
The rental sector does seem to be a little different as some properties have seen an increase whilst many others have seen a drop in price as a result of the way in which the rental market is structured in Egypt. During 2015, there are plans to add an extra 31,000 units, 11,000 will be located in New Cairo and 19,000 will be in the 6th of October.
The Economic Summit has portrayed a positive outlook and this is likely to see additional investment in Egyptian property which will further strengthen the market in 2015.
During the first three months of this year, in Al Rehab City in New Cairo, 250 units were completed along with 640 units in the Zayed complex, helping to increase the current supply to 106,000 units. Throughout the remaining months of 2015, there will be 31 additional residential developments completed and this will add an extra 30,000 units to what is already available.
The office market in Cairo saw a marginal improvement in the first few months of 2015 as rental rates rose considerably in New Cairo as there was an increase in demand, however, there was no change to the rental rates in central Cairo and West Cairo.
Park Avenue, located on the Cairo Alexandria Desert Road was the first major completion of 2015 but it is still not operational.
The report highlighted that there was a decrease in the vacancy rate of 2% since the final quarter of 2014, proving that commercial space was in high demand. The vacancy rate has increased year on year and this is mainly down to the fact that 100,000 square metres has been introduced throughout the year.
In 2015, the office supply in Cairo is expected to grow, and an additional 37,000 square metres is being added of which 17,000 will be delivered during the second quarter. In comparison to previous years, the supply of office space is generally lower. The demand for office space is now split evenly between Sectors One and Two in New Cairo. There is an improved parking availability in Sector two along with new supply and competitive prices. The increase in demand is now causing developers to increase their prices.
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