About 500,000 additional residential units need to be supplied by 2020 in order to bridge the market's supply and demand gap in Greater Cairo, a recent report for Colliers International said, highlighting that the gap will be concentrated in the affordable housing category. "With government sponsored programmes aimed at economic housing, and key developers launching projects targeting high-income residents, the market gap for affordable housing targeting the majority of middle income residents remains unmet," the report said. Around 90,000 to 100,000 residential units are demanded each year. About 77% of that demand is generated by middle class Egyptians. "Income levels of this majority range between $5,000 and $65,000 per annum, and affordability is limited to units priced below $151,000," the report said. Economic housing represents 16% of the total demand while low cost housing comprises to 5%. Demand of luxury houses contributes with 2% to the total demand. The report stated that 45,000 new units are supplied to the residential market annually, with the concentration being on economic housing. Residential units' prices The sale prices for apartments and villas both increased between 2013 and 2015. Villas' prices surged by 64% to reach $2,000 per sqm while apartments' prices climbed up by 27% to reach $870 per sqm. Rental prices for apartments also increased by 14%, costing $55 per sqm per year. Prices of rental for villas dropped, however, inching down by 4% and recording $90 per sqm per year. The report attributed this decline to the price drops in Zamalek. Retails units According to the report, there is a 1.3m shortage in the gross leasable area (GLA) in the retail sector. The market is predicted to be undersupplied by some 1m sqm by 2020 despite the supply of additional 600,000 sqm GLA in the next five years. "The average rental rates in key shopping malls range between $408 per sqm per annum and $1,200 per sqm per annum," the report said. "Occupancy levels for Grade A shopping malls range between 80% to full occupancy." The demand for GLA in Cairo is expected to reach 2.4m sqm, rising from the 2.2m sqm demanded in 2015. On the retail units' supply, the report indicated that by end of this year "the total organised retail supply in Greater Cairo is expected to reach 1.1m sqm GLA".
