In Egypt, love isn’t enough

In Egypt, love isn’t enough

The difficulty of finding and affording an apartment has forced couples to postpone marriage. But new housing policy reforms may be giving young couples a break.

December 9, 2008 11:14 by kippreport

It’s hard enough trying to find the right person to marry, but finding affordable housing in Egypt is even harder. So hard, in fact, that young couples have had to postpone marriage because of skyrocketing property prices and rents, and a dire scarcity in well paying jobs.

Due partly to expensive property prices, almost 50 percent of Middle Eastern men between the ages of 25 and 29 are unmarried. In the Middle East, young men and their families customarily buy and furnish their marital home, making marriage a substantial financial burden. Consequently, young men wait till they have enough money to start their ‘married life’. In the interim, young men and women remain in their parents’ homes.

But the Egyptian housing market may soon change. In the first policy outlook by the Middle East Youth Initiative – a joint venture established by the Wolfensohn Center for Development at the Brookings Institution and the Dubai School of Government in July 2006 – Ragui Assaad and Mohamed Ramadan explain in their report entitled ‘Did Housing Policy Reforms Curb the Delay in Marriage Among Young Men in Egypt?’ how housing policy reforms in Egypt have now made marriage more affordable for young men and women.

According to the study, the effects of housing reforms made over the past 12 years are being felt today. The reforms began in 1996 with a law dubbed the “new rent,” which allowed for definite duration rental contracts and gave landlords the flexibility to reassess the terms of the contract once it has expired. However, the law could only be applied to contracts signed after it was passed; therefore, tenants already living in rented households could not be subjected to an increase in rent.

Furthermore, in 2002, the inheritance of housing contracts was limited to only one generation. Subsequently, in 2006, there were 1.43 million vacant units (12.4 percent of the housing stock). “The increased supply would result from owners of vacant units putting them on the market and investors building new units,” the report said.

The study shows that the reforms have allowed young men and women access to “key markets,” such as housing. They have “reduced barriers to young people entering the rental housing market by liberalizing restrictive rent controls, allowing for more definite contracts, and reducing the need for young home seekers to provide large capital outlays (advance rent), in order to obtain initial housing,” explains the report.

“As more people live in urban cities, access to affordable housing will be one of the most critical issues in Egypt. This research shows that Egypt is making headway in developing better housing policies and it is having a positive impact on the lives of young people,” says Navtej Dhillon, Fellow and Director of the Middle East Youth Initiative.
The study also claims there has been a “reversal in the delayed marriage trend” in Egypt due to the new housing reforms policies. With access to rental (albeit expensive) units in the capital, young men are no longer pressured to save and pay hefty down payments on homes. And with improved home financing options in the countries, delaying marriage due to housing shortages and overpriced units is no longer necessary.

“Housing markets had been biased toward protecting existing occupants,” says Ragui Assaad. “The result has been that newcomers – and young people in particular – have had a hard time acquiring housing. New reforms have introduced definite duration contracts in the rental market and have helped a lot of people, especially newly married couples, acquire housing.” –DM