Amid Egypt’s current spike in the real estate market’s growth rate, rental properties are witnessing their expected increase as summer rolls in and Ramadan comes to a close. This is the time of year when the price of rental properties always experience an increase, especially with the influx of Gulf tourists who come to spend their summer vacations in Egypt.
Real estate market stakeholders expect that rent prices will increase by 25% this summer, one of the highest increases witnessed in a long time.
The phenomenon of the increase in rental properties during the summer season highly depends on tourists flocking in from the Gulf region. These tourists prefer renting an apartment, specifically on the Nile Corniche, in Downtown Cairo, Garden City, or Dokki, rather than seeking accommodation in a hotel.
Mohammed Badawi, a broker in Garden City, said that the real estate brokerage market flourishes in the summer, given that tourists from the Gulf area rent apartments for a month or two.
Badawi added that the contact with Gulf tourists is usually established a month before the individual lands in Cairo, and that a deposit is paid in advance.
He pointed out that some customers prefer booking after coming to Egypt to avoid fraud.
He noted that the cost of renting an apartment in Downtown Cairo costs between EGP 7,000 and EGP 8,000 a month.
New cities on the map
A broker in the Fifth Settlement said that Gulf tourists usually rented apartments on the Nile Corniche, in Downtown Cairo, Garden City, and Maadi. However, they now prefer new cities, such as the Fifth Settlement, Sheikh Zayed, 6 October City, and fully facilitated compounds with gardens, cafés, spas, and social clubs.
The broker revealed that the rent prices of such residency units start from EGP 10,000 a month. He added that the broker gets 30% of the amount, and the rest goes to the owner of the unit.
He explained that Gulf tourists determine the specifications they desire, and the broker searches for a suitable unit. He also pointed out that these tourists prefer apartments over hotels in order to enjoy their privacy.
Gulf tourist as an element of price increases
Mohsen Hafez, a real estate expert and owner of a real estate advisory company, said that since 2008, the real estate market witnessed a great turnout, causing a boom in the sector. However, the two years following the 25 January Revolution did not follow that trend.
He explained that the tourists coming from Gulf countries influence the rent market in Egypt, especially in the summer, pushing rent prices to a 25% increase compared to last year.
Hafez pointed out that the increase also affects the rent costs for Egyptians, as rent prices increase by 5% annually. This percentage sometimes goes up to 10% and 12%.
“Real estate brokers are used to raising prices, especially for Gulf tourists, because of the prominent belief that they are wealthy,” Hafez added.
Rental properties reach EGP 20,000 per month
Hafez revealed that prices for rental properties vary from area to area, depending on the units’ facades and spaces. As an example, he stated that prices in Downtown Cairo start at EGP 8,000, while prices in Garden City start at EGP 20,000.
Additionally, rent prices in new cities start at EGP 10,000, in addition to EGP 5,000 for insurance if the tourist requires any amendments to be made to the rented unit. “Tourists usually request some modifications, such as modern decoration, the latest trends in furniture, consistent maintenance, and cleanliness,” he explained.