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Own or rent. What do young people in the MENA feel

Many young people feel priced out of the real estate market, forcing them to rent apartments.

Own or rent. What do young people in the MENA feel
[Source photo: Pankaj Kirdatt/Fast Company Middle East]

Owning a home has been part of everyone’s dream, and it is one of the biggest investments many people plan for in their lifetime. However, one demographic isn’t necessarily setting its sights on homeownership right away.

Across the Middle East and North Africa, the dream of owning a home is slipping further out of reach for young people as housing prices have skyrocketed in recent years. 

Many young people feel priced out of the market, forcing them to rethink their housing aspirations and navigate a future increasingly defined by renting.

Deloitte’s 2024 Middle East Real Estate Predictions for Saudi Arabia highlight a decline in residential transaction volumes and a rise in sales prices. Despite the surge in supply, the total number of residential transactions in Riyadh, Jeddah, and the Dammam Metropolitan Area amounted to 67,233 in 2023, totaling $ 21 billion, reflecting a 15% decrease in value compared to 2022.

Meanwhile, Riyadh and Jeddah saw an upward trend in rents.

JLL’s Cairo Real Estate Market Overview Report for Q3 2023 paints a similar picture for real estate in Egypt, stating sale prices in Cairo are expected to continue their upward trajectory in the short to medium term.

Carl Allsopp, CEO of Allsopp & Allsopp Group, says rising interest rates and inflation have rendered purchasing real estate unattainable for many young people. 

“Affordability has been significantly impacted with property prices increasing the last three years, surpassing the 2014 all-time high, coupled with 11 interest rate hikes in under two years, has made the point of entry into buying a property even more challenging for the youth. Larger down payment and higher monthly mortgage repayment result from higher interest rates.”


Following an unstable 2023, this year’s economic outlook does not look much better. The IMF projections for 2024 growth in the MENA region have been revised downward by 0.5% from its most recent October forecast. GDP is now expected to expand by 2.9% in 2024, following weak growth of 2% in 2023.

Allsopp says economic instability and current inflation have impacted everyone. “While salaries have increased, so have bills, food, cars, with property prices seeing the biggest surge, some areas of Dubai have more than doubled, forcing people to either rent or purchase a property further afield.”

29-year-old Madonna Nabil, who’s looking to buy a house in Cairo, attributes her struggle to rising inflation, which has a more significant cost-of-living impact on her low income. “Young people cannot purchase a home unless they engage in social housing programs or secure real estate loans.”

Echoing the same sentiment, Dina Maher, a customer service support engineer at Bosch Packaging Technology, says real estate prices are unreasonably high. “Newer generations face greater challenges,” she says, noting that her parents had more favorable opportunities.


Although renting is the more pragmatic choice, it is still difficult for many. As demand rises, so does the average rental cost. Egypt saw a significant surge of 24% compared to the corresponding period of the previous year, according to a 2023 report by Property Finder.

“I would like to own a home one day, but renting a place is the practical option now,” says Maher.

Despite currently renting, Nabil dreams of buying a home soon. She says the funds allocated towards rent could be potential installments for a home. 

In the UAE, a 2023 report by real estate services firm CBRE shows a 43.5% increase in the total number of tenancy contracts in Dubai, reaching 325,727, compared to the agreements recorded during the same period in 2019.

Not only that, but renters also show a reduced willingness to move due to the added expenses of securing new leases, especially in prime residential districts.


Sidharth Mehta, Partner and Audit at KPMG Lower Gulf, says the private sector can be vital in enhancing housing affordability for young people. 

“Collaborating with the public sector, private developers can focus on creating more affordable housing options tailored to the needs of younger demographics. This could involve introducing innovative financing schemes, developing more budget-friendly units, and prioritizing sustainable and cost-effective construction methods to reduce overall costs,” Mehta says.

Location is also crucial for the affordable housing market, says Mehta, as it directly affects access to essential amenities, transportation systems, job prospects, and community services.

“The private sector can play a key role in facilitating well-located affordable housing developments, offering residents proximity to schools, healthcare facilities, and commercial centers, enhancing overall quality of life.”

Allsopp also emphasizes developers’ crucial role in devising strategies to facilitate young people’s ability to purchase property. He cites examples from the UK, where developers are mandated to sell shared ownership properties. This entails a first-time buyer purchasing a 25% share in a property, with the developer retaining ownership of the remaining share while receiving rent from the buyer. “This allows a buyer to put down less of a deposit, which is the biggest challenge; this could work in the UAE.”

Government policies, like the Golden Visa program in the UAE, which facilitates real estate ownership, have played a significant role in younger people eventually becoming homeowners. 

“We should consider how to allow more first-time buyers into the market, be it concessions on land department fees or more lenient LTVs with banks,” adds Allsopp.

Both Nabil and Maher advocate for government intervention to alleviate the challenges of younger generations, like simplifying and increasing accessibility to housing loans and government regulation of real estate prices.

“The prices are incredibly impractical, requiring millions for a small apartment in a remote location, especially when numerous apartments remain vacant due to unaffordability,” says Maher.


Mehta says exploring diverse housing options, including rent-to-own schemes, is essential. “The debate surrounding whether to rent or buy is among the most intensely discussed topics when aiming to optimize both lifestyle and personal finances.”

He also says to prioritize financial planning, saving, and exploring additional income streams, as they can enhance affordability opportunities. Consulting with financial advisors and real estate professionals can offer valuable guidance in navigating the housing market and making informed decisions aligned with long-term financial objectives.

“Several developers now offer post-handover payment plans for off-plan sales, leading to a diverse range of housing options for buyers. Home loans over the years have become more accessible, enhancing flexibility for individuals considering homeownership while effectively managing their day-to-day cash flows.”

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