Scenarios after the Old Rent Law in Egypt: Boom or Stagnation in the Real Estate Market?

The Old Rent Law in Egypt

Scenarios after the Old Rent Law in Egypt: Boom or Stagnation in the Real Estate Market?

The Egyptian real estate market has entered a new phase of change, after many years during which the relationship between landlords and tenants remained captive to an outdated law, a constant source of contention.

Millions of tenants clung to this old law as a shield to protect them, while landlords viewed it as an "injustice" that deprived them of their legitimate rights for decades.

Now, with the introduction of the Old Rent Law of 2025, the stage appears set for radical transformations affecting one of Egypt's most complex social and economic issues. Between those who consider the law a long-awaited breakthrough and those who view it as a threat to the stability of millions of families, the real estate market stands at a crucial crossroads.

The Logic of Supply and Demand

In exclusive statements to Al-Ain News, Dr. Mohamed Al-Shawadfi, Professor of Management and Investment, believes that dealing with the old 2025 Rental Law represents a true return to the logic of the free market, based on supply and demand mechanisms, after years of restrictions imposed by the socialist economic era.

He believes that the stabilization of rental values was one of the most prominent aspects of this restriction, which has kept the relationship between landlords and tenants far removed from market logic for years.

With the implementation of the new amendments, especially after the end of the seven-year transitional period, it is expected that a number of tenants will leave their housing units. However, the majority—in his estimation—will reach an agreement with the landlords to continue living there, but in accordance with the new market rules.

The Fate of the Landlord-Tenant Relationship

From his perspective, the situation is divided into three main dimensions:

First: The psychological and social dimension, related to the impact of forced relocation on some tenants who will be forced to seek alternative housing, a percentage he believes will not exceed 20%. Second: The negotiating aspect, as most owners will prefer to rent their units at market prices rather than leaving them vacant, opening the way for new understandings between the two parties.

The third and most important dimension, from his perspective, is the direct impact on the real estate market. The exodus of a number of tenants will generate new demand for residential units, especially in new urban areas, stimulating buying and selling activity.

The law will revitalize the market

For his part, Egyptian economic expert Ahmed Al-Zayat believes that amending the old rent law has sparked a wave of legal and social controversy, with opinions divided between those who support the legislative amendment and those who oppose it, fearing its repercussions for affected groups. This controversy appears likely to continue in the coming period, especially pending the issuance of the executive regulations following the approval of the House of Representatives.

From his perspective, the law will bring about significant changes in the real estate market, given that approximately two million residential, commercial, and administrative units are expected to be re-offered to the market after being vacated by tenants. This is expected to enhance market stability and prevent any sudden price spikes.

This new supply, whether from units developed by government agencies and real estate developers, or those reclaimed by owners and relisted for sale or rent, represents an additional supply segment that will positively impact the balance between demand and supply and push toward a more stable market.

Rising Rents

In this context, the Egyptian economic expert revealed to Al-Ain News that unofficial estimates indicate the presence of approximately 1.2 million old-rent units in Cairo Governorate, approximately 635,000 in Giza, and approximately 420,000 units in Alexandria. This places these governorates at the forefront of the expected changes in the coming period, both in terms of rental activity and the re-offering of units to the real estate market.

No Surprises

In a related context, banking expert Sahar El-Damaty, former Vice President of Banque Misr, notes that the repercussions of the old-rent law, once passed, will be significant for the real estate market. However, at the same time, this is not surprising, as discussions about the need to amend this law date back more than twenty years, but its implementation was not seriously discussed until recently.

Al-Damati points out that a large number of rental properties belong to owners who have passed away, with their children or grandchildren continuing to rent them at nominal prices. This is despite the fact that the residential real estate sector, which includes old-rent units, is estimated to represent between 22 and 23% of Egypt's GDP.

Unemployed Neighborhoods at the Heart of the Crisis

The banking expert focuses on the nature of the areas where old-rent units are widespread, explaining that the vast majority are located in working-class neighborhoods, or what is known as the "lower middle class." Units located in areas such as Heliopolis, Zamalek, and Heliopolis represent a much smaller percentage, often covered by individual agreements or developed over time.

Attractive Alternatives

In light of the current construction boom, she believes the market now offers realistic alternatives for segments that may be affected by their exit from old-rent units. According to her, real estate developers are now offering unprecedented payment plans and facilities—including installments over 12 years with no down payment—which reflects a significant shift in the philosophy of real estate supply.

For low-income groups, especially those living in poor areas, Al-Damaty expects the trend to shift toward subsidized housing projects led by the state. She points to the role of the Social Housing Fund, led by Mai Abdel Hamid, as the entity with the vision and tools to address this segment and provide appropriate alternatives in various governorates.

A Long-Delayed Uprising

In the same context, Egyptian economic expert Ahmed Khattab believes that the passage of a new rent law in Egypt represents a true revitalization of the market, especially since the law has been delayed for years and has caused significant harm to landlords.