This according to JLL, a leading global real estate investment and advisory firm, which recently released its Cairo Real Estate Overview report for the first quarter of 2014.
“Egypt’s political situation remains a primary driver of economic conditions, and therefore the real estate market in Cairo,” said Ayman Sami, Head of Egypt Office at JLL. “All four sectors… – residential, retail, office and hotel – remained relatively subdued and close to the bottom of their current market cycle.”
The real estate firm noted that despite the resignation of the Parliament in February, progress on the political road map has continued during the first quarter. The upcoming presidential election, scheduled for late May, is the major short term political challenge facing Egypt.
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"We will monitor (the election) closely to see what the likely impact on real estate will be going forward. If political stability continues to drive an improvement in the economic environment, then rents could start to increase again towards the end of 2014,” added Sami.
"Progress on the political road map has continued"Although there were some new completions in the residential and retail sectors during the first quarter of the year, many projects continue to be delayed due to construction and permit issues and the uncertain political outlook.
In the residential leasing market, demand and rents for villas have declined while they increased for apartments, which are seen as more secure and are often available on a shorter-term lease, according to JLL.
Economic news in the first quarter of 2014 has been mixed with a slight bias on the positive side. The financial and political support from the GCC (except Qatar) has contributed to the positive signs, with the EGX 30 index remaining at some 70% above its lows of mid-2013.