Egypt’s real estate sector suffers from a mismatch of supply and demand for housing units, Emad Al-Masoudi, chief executive of Aqar Map online portal told Daily News Egypt.
Al-Masoudi urged the government to boost cooperation with real estate developers to rectify this.
The Egyptian real estate sector requires cooperation between the government and privately-held real estate companies to provide housing units for low-income citizens in the coming period, Al-Masoudi added.
Daily News Egypt interviewed Al-Masoudi, who released his portal in 2011, where he outlined there is excessive demand for inexpensive housing units amid low supply. At the same time, he noted there is an excessive supply of expensive housing units exists despite low demand.
Where did the idea for the Aqar Map online portal come from?
The idea came out of a need to provide solutions for the lack of transparency between buyers and sellers in the Egyptian real estate market, and provide opportunities for suitable housing units.
We wanted to offer a fast service that provides all home seekers with access to affordable prices as the real estate sector is rapidly growing amid increasing internet subscribers.
That does not mean that we do not have online competitors, but despite this, we have managed to take the lead in online traffic in just three years.
How many online users are on your website?
The website’s online visitors grows exponentially every month. They reached one million visitors last month, compared to 300,000 two years ago.
How did you achieve such an accomplishment in such a short time?
The Egyptian real estate market is so massive that it needs a media forum for observing transparency in providing housing units.
We send daily messages about housing opportunities to our email subscribers so that they can look into them. That has helped increase online traffic over the past year.
Do you have a marketing plan for the housing opportunities on your website?
Indeed! We are focusing on meeting demand on housing units in the governorates of Greater Cairo, North Coast, Red Sea and South Sinai.
What about the other governorates?
We do not know about real estate market trends in these areas, especially the governorates in Upper Egyptian and the Nile Delta area. Even in Cairo, there is a complicated network of transactions between small contracting companies and apartment seekers. The real estate market is huge and requires a lot of research and study.
Does Aqar Map conduct any studies or research papers about Egypt’s real estate sector?
No, this is an arduous process and requires a large group of experts with data analysis skills, and Aqar Map currently does not have these capabilities.
Yet Aqar Map does not mind providing real estate research centres and researchers with information as long as it will benefit the sector and generate transparency.
You said that the online visitors on your website have reached one million? How many property transactions have you conducted?
In 2013, Aqar Map conducted transactions for 7,500 housing units worth EGP 3.5bn, and we hope that the transactions will reach 9,000 housing units worth EGP 5.5 bn by the end of this year.
Do you provide the buyer with further data about the housing units?
The website offers data about the price, space, and site of the housing unit. Any other information should be sought by the buyer, who is responsible for researching legal terms and conditions concerning the housing unit.
What is the interaction between supply and demand on your website for housing units like?
As I told you before, there is a mismatch between demand and supply in the Egyptian real estate market, as the demand on low-cost housing units is 60% with only 25% supply.
That means that the low-income citizens find great difficulty in pinning down suitable housing opportunities. Demand for middle-income housing, meanwhile, amounts to 32% with a 50% supply.
Demand on expensive housing units is 8% while supply stands at 25%.
There is a vast supply of expensive housing units as real estate companies prefer such units due to high profits. Real estate companies, however, know well that the demand on expensive housing units has been declining in recent years.
What about the age brackets on your website?
The age groups that visit the website most vary between 28 and 35 years. There is also a proportion of those in their 50s and married people searching for housing units on the site. The website is also frequented by growing numbers of expats.
How many real estate companies you have signed contracts with?
We have contracted with 40 companies for the time being, compared to 6 companies in our first year. We aspire to have contracts with 50 companies by the end of this year.
What are the largest companies you deal with?
The largest companies we deal with are Al-Morshedy, Abraj Misr, Almoez Group, La Mirada New Cairo, Emar Misr, Beta Egypt for Urban Development, Mimary Group, Newtown, Newedge, and Art Home Company.
What are the areas that have large demand on housing units?
Demand on housing units is growing in the Fifth Settlement despite high prices, followed by Al-Shorouk, Maadi, Sheikh Zayed, and 6th of October City. There is a medium-scale demand for housing units in Hadayek Al-Ahram, Moqattam, and Mohandessin.
Some areas, like the North Coast during the summer, witness seasonal demand for housing units.
Ain Sokhna is also one of the areas that attract significant demand from both nationals and expats.
In the Red Sea resorts and South Sinai, demand for housing units is just 5% from foreigners and expats, but that figure is expected to jump to 20% when tourism regains its strength.
From your point of view, how can Egypt’s housing crisis be solved?
This is a tough question. To be honest, the state will not be able to provide affordable housing units for all segments of society. Real estate companies need to increase investments in the affordable housing units amid tough economic times. They also can boost their cooperation with the government to build affordable housing units for low-income citizens.
Does Aqar Map exist in other markets apart from Egypt?
We tapped into the Saudi market six months ago and it is totally different from the Egyptian market in terms of demand and supply for housing units. The Saudi real estate market is focused on luxury villas and the prices are far higher than Egyptian housing units.
How many Saudi firms have you signed contracts with?
We contracted a few Saudi companies over the last six months and the website is visited by 250,000 subscribers. I think this is a good start.