The residential sector has performed strongly throughout 2018. The strong performance of the off-plan sector has however negatively impacted the secondary market, as buyers are preferring to hold off and wait to purchase off-plan units completed in 2019, according to JLL’s A year in Review 2018 report.
The report noted that the strongest performing sector of the sales market has been villas in New Cairo, which saw a 16% increase in sale prices over the year. The fourth quarter (Q4), however, saw prices remain relatively stable.
Furthermore, the report noted, “With most of the demand being captured by sales of new properties, the secondary market has remained stagnant, with few sales and a fall in average prices reported in some locations.”
The report also highlighted that there has been a noticeable increase in rents across the monitored submarkets as this sector moves into the early upturn stage of its cycle.
“The strongest performing market has been Sixth of October, which recorded increases of 17% in apartment and 14% in villa rentals in 2018. This increase in rentals can be partly attributed to a shift of residents’ lifestyles, with more interest in renting rather than purchasing units, with other tenants leasing units on a temporary basis awaiting the delivery of their off-plan units,” the report read.
Around 18,000 residential units were added to the supply within gated communities in Cairo in 2018, the highest figure for a number of years. Q4 of 2018 saw approximately 840 residential units delivered to the market with the completion of Midtown and Regents Park in New Cairo, bringing the total supply up to 155,000 units, according to the report.
It also added that a similar level of completion is expected in 2019, with another 17,000 units expected to be delivered. There is currently a much higher level of completions scheduled for 2020 (43,000 units), but not all these units are likely to completed on schedule.
