OLX Properties, the leading classifieds platform for properties in Egypt, revealed changes in the users’ behaviors and property rates followed by the decision issued by Central Bank of Egypt (CBE) to raise key interest rates twice consecutively in November 2016 and July 2017.
CBE has announced an increase in the interest rate by over than 18 percent in order to limit the demand and stabilize the country’s economy. Economists stated that this decision will reduce the demand on the property market and results in a drop in the price rates of the basic services and products.
Meanwhile, Real estate experts expected an increase in the prices in properties in Egypt, resulting in a significant recession in the demand for the residential units. OLX Properties, expects more capital flow in the real estate sector in the short term, despite the ongoing inflation reported in the Consumer Price Index for July.
The Index showed an inflation rate of approximately 33 percent. However, the platform statistics recorded an increase in the number of listings in the property section by 12 percent in July 2017 compared to the previous month (June), a result of the increase in interest rate after property owners have liquidated their assets to secure capital revenues in the form of interest from bank deposits and certificates.
Moreover, OLX stated that searches increased 52 percent for properties for sale listed on the platform. It is worth mentioning that the search volume for residential units usually increases in the summer season, especially by the Egyptian expats returning to spend the holidays in Egypt.
The report also highlighted the price increase of some areas after the Egyptian pound flotation in November 2016, where Sheikh Zayed City price rates increased by 11 percent followed by 6th of October and the 5th Settlement by 5 percent, lastly New Cairo by 7 percent.
General Manager of OLX Egypt, Momtaz Moussa, commented: “Despite the recent changes in the Egyptian economy, the report results show the great interest in investing in properties in Egypt, whether from the platform users based in Egypt or the Egyptian Expats living in the GCC. OLX Properties witnessed exponential growth with 3.4 million users per month, a comprehensive sample that reflects the trends of the property market in Egypt”.
For the second time, the prices increased after the raise of interest rate in July 2017 compared to May and August 2016. In this regard, the 1st Settlement selling price increased 12 percent, followed by Sheikh Zayed City and Maadi 4.5 percent, and 2 percent, respectively.
On the other hand, the prices in El Shorouk City have dropped by 5 percent while in other areas like New Cairo, 5th Settlement, and 6th of October, the prices remained stable. According to the report, the number of Egyptian expats who visited OLX platform in July 2017 increased compared to June (after the decision to raise key interest rates for the second time).
Saudi Arabia was on top of the countries with a 34percent increase in visits, followed by Kuwait and Qatar by 13 percent, and UAE by 10 percent.
