A new survey charting the performance of the real estate market has been released, Eman Youssef reports The survey, which was conducted by Synovate, an international market research firm, reveals that 21 per cent of upper and middle class Egyptians have plans to buy or rent new properties in the next 12 months. According to the survey 75 per cent of the surveyed population was convinced it is the right time to buy a new house, expecting prices to drop following the global economic slowdown. The survey showed optimistic results, although the real estate market is still anticipating the actual impact of the international crisis. According to Tamer El-Naggar, managing director of Synovate North Africa, the real estate market was less vulnerable to the global crisis. He also emphasised that in 2004 the government began undertaking important reforms making the sector a key platform component of Egypt's investment scene. Although prices slightly decreased in the aftermath of the economic crisis, El-Naggar explained that real estate developers are now determined to offer new payment facilities in order to attract more buyers. "The real estate market witnessed unprecedented growth over the past few years," El-Naggar told Al-Ahram Weekly. According to the survey, 64 per cent of those who are considering buying or renting a new property in the coming 12 months want to replace their current house, while 36 per cent plan to buy a second house in addition to their current residence. El-Naggar said that according to government reports, the real estate sector was less affected by the economic slowdown but that did not prevent purchasing power in Egypt decreasing by 21 per cent due to the economic crisis. "In general, Egyptians believe in the stability of real estate investments and are aware of the changing business cycles." El-Naggar said. He added that the government plays an important role in providing the required infrastructure to encourage real estate developers to offer loans and facilitate payment terms to lure low- income buyers. The survey also revealed that 50 per cent of those considering buying or renting a new house are looking for bigger houses, 22 per cent are buying property for their sons and daughters, 11 per cent for marriage, 10 per cent for investment purposes, two per cent are buying summer resort properties, two per cent want to move to compounds, while one per cent want to move to smaller houses and one per cent are looking for quieter places. According to the Oxford Business Group, the amount of units needed to meet the housing demand is estimated at six million, and there are around 500,000 marriages annually, so there is a gap between supply and demand. The survey also presented information on the most preferred areas for living, which included 6 October governorate, followed by New Cairo. According to Mohamed Kamal, business development director for Synovate North Africa, Egyptians now prefer to reside in the so-called new zones, which provide privacy and quietness, after years of crowding in populated areas, mainly in Heliopolis, Nasr City and downtown. The survey also revealed that the ideal residence for Egyptians was an apartment that is half finished (42 per cent), aiming to complete the finishing at their own financial pace. Moreover, most Egyptians prefer 150 square metres as an ideal average size for the flat, and they prefer to have two bathrooms instead of one (69 per cent). The study found that real estate companies' television commercials had the highest impact in attracting buyers. Some 34 per cent of Egyptians who consider buying or renting new properties took action after watching real estate commercials on television, while 56 per cent visited the compound location, 35 per cent called the company and 25 per cent visited the company, according to the survey. Some 1,131 persons, representing the upper and middle-upper class, were surveyed, 65 per cent of which live in Greater Cairo, 25 per cent live in Alexandria, and 10 per cent in the Red Sea governorates, including Hurghada and Sharm El-Sheikh. The survey reported that for 88 per cent of those surveyed, unit price was the main decision-maker; the developer's credibility came next with 80 per cent, followed by the property's closeness to schools or universities (78 per cent) and the terms of payment (73 per cent). Marwan Shehada, managing director of Al-Futtaim Capital, commented that the survey is optimistic because the Egyptian economy was less affected by the global financial crisis. "Sales will remain stable but might not increase," said Shehada. According to Maged Abdel-Azim, deputy head of Al-Dar Company for real estate and member of the board of directors of the Arab Real Estate Association, during the last quarter of 2008 and the beginning of 2009, purchases of properties in Egypt decreased by 5-20 per cent, compared to 50 per cent in the United States and Dubai. "Real estate developers are taking steps to attract buyers and match present market realities," said Abdel-Azim, adding that developers are establishing new payment methods and offering better deals and valuable gifts with their properties. "Part of the buying motive is for investment purposes and not all stemmed from real demand," Abdel-Azim said, adding that Egyptians consider real estate a safe place to put money.
