Egypt’s rental market went from the back to the front of a national conversation overnight. The New Rental Law (Law No. 164 of 2025), which was signed by President Abdel Fattah El-Sisi and entered into force in September, has led both landlords and tenants to use Google and social media in a competition to grasp the implications of the new regulations for them.

The Old Rent Dilemma

The debate over “old rent” has been a problem for both the government and parliament for quite some time, creating a two-fold dilemma of social justice versus property rights amidst changing economies and new urban policies. For 26 years, the matter remained unresolved before Egypt’s Constitutional Court, until President El-Sisi, in October 2023, suggested that the old rental law be modernized, observing that two million housing units were vacant and unusable because of the outdated regulations, mainly due to the death of the owners.

On November 9, 2024, the Supreme Constitutional Court issued a landmark ruling, declaring the first sentence of Articles 1 and 2 of Law No. 136 of 1981 was unconstitutional. The Court then ordered the Egyptian Parliament to alter the law before the expiration of the current legislative term in June 2025, and this has now been done.

New rules

Pursuant to Rental Law No. 164 of 2025, a seven-year transition period is imposed on the residential units leased under the old rental contracts, during which period the rent will be increased gradually as per a fixed schedule.

Articles 3 and 4 establish the real estate classification system, dividing areas into three categories with corresponding rent increases: in the prime areas, the rents will rise 20 times above their current level, with a limit of EGP 1,000 per month; in the medium-income areas, rents will go up 10 times, with a minimum of EGP 400 per month; and in lower-income areas, rents will also increase 10 times, with a minimum of EGP 250 per month.

Moreover, Article 6 enforces a uniform rise of 15% each year during the entire transitional period on the new rental amounts.

On the other hand, non-residential units like commercial shops and administrative offices are regulated by article 2 which indicates a shorter transitional period of five years. Residential rental contracts will terminate seven years after the law takes effect (August 4, 2032), while non-residential contracts will end after five years (August 4, 2030).

Additionally, Article 7 outlines two situations whereby the lessee’s right to occupy the premises under the existing contract will be terminated, and the premises vacated prior to the conclusion of the transitional period: (1) if the tenant or their successor under the lease keeps the unit closed for more than one year without valid reason, or (2) if the tenant or their successor has another residential or non-residential unit that is suitable for the same intended purpose. These situations have to be verified by the appropriate court, and eviction will not be carried out except through a judicial order or ruling. The tenant also has the right to appeal the decision or to challenge it. The termination of a contract at the end of the transition period should not be viewed as if it were an eviction that occurred automatically. Rather, it is an indicator of the landlord’s right to the unit. If the landlord’s need for the unit no longer exists, it can be sold at market price or a lower-rate arrangement with the existing tenant can be negotiated without any legal obligations involved.

Moreover, the law wipes out all past regulations regarding old rents including the 1981 Law No. 136 and the 1977 Law No. 49, which means that every lease signed before January 31, 1996, automatically complies with the new law. Nevertheless, the law does not apply to fixed-term leases executed after January 30, 1996, the so-called “59-year contracts,” which continue to be regulated by the Civil Code.

To understand the significance of these changes, it helps to trace how Egypt arrived at this point.

Historical Background

In Laws, a character in one of Plato’s dialogues notes that laws “are not made by human beings but by accidents or misfortunes-war, epidemics, famine, or a succession of bad seasons.”

Over the past decades rent control policy has been applied through a series of laws and regulations. It started in 1924 and then again in World War II. Gradually, it was growing through different legal actions that permitted the freezing or cutting down of rents for the houses which had already become old by the middle of the 20th century.

The eventual rise of the Free Officers in 1952 led to housing market intervention. They placed all tenancies approved between 1944 and 1952 under rent control with an automatic 15% cut on controlled rents. This paved the way for a socialist housing legacy that later came with Nasser. The 60s and 70s were periods of continued legislative interference with successive laws progressively reducing rents for contracts up to 1961, while a 1962 attempt went to reassess rental values but was shelved owing to administrative delays and lack of trained staff.

By 1969, Law 52 and its subsequent amendments resulted in the establishment of the current “Old Rent” system, which kept rents exceedingly low for many years. In the meantime, the construction of government housing projects witnessed a drastic drop in the period from 1965 to 1975 due to the siphoning off of national income to military spending, thus increasing the disparity between the available housing and the overall demand. To get rid of the deformities caused by these long-standing controls, the government enacted Law 4 of 1996, which remained in effect until this year.

Two Rental Worlds

Egypt has long faced a dual rental market, consisting of two parallel yet fundamentally divergent systems. The first market has long been distorted by frozen old-rent contracts. In this market, it remains possible for a luxury apartment in Heliopolis or Zamalek in Cairo to be rented for as little as 17 to 30 Egyptian pounds per month. In the current context, many of these apartments have been passed down through generations, placing landlords in economically constrained positions and significantly reducing the return on their properties. More concerningly, the second market is driven by rapidly escalating costs, rendering housing increasingly inaccessible. In the very same districts, rents may reach 6,000 Egyptian pounds per month or higher, placing them beyond the reach of most Egyptian households, including the middle class.

The former rental system, though instrumental in the safeguarding of low-income families and the provision of affordable housing, did also suffer from drawbacks that at least partially countered its advantages and thus necessitated their removal. The inheriting of rental contracts is one of the main problems, allowing leases to pass through the original tenant to relatives of up to the third degree.

Consequently, private investors’ attention has been redirected to the building of owner-occupied apartments, whereas some landlords only agree to rent their properties at very high rates. Other issues are the changing of residential units in the old rental system into administrative or commercial units, anti-tenant actions like ruining and neglecting tenant-occupied properties due to the landlord’s non-maintenance of public services, and the declining relative value of old rents. The economic crisis manifests itself in a big gap between the low rent values that were determined decades ago and the present market rates. The long period of price stability has caused the property owners’ returns to be lower than they would be otherwise, particularly when living and land costs are on the rise, resulting in a lack of equity and balance both socially and economically.

As per the Central Agency for Public Mobilization and Statistics (CAPMAS) in the year 2017, Egypt was reported to have a total of 23,455,079 households among which around 1,642,870 households (7.0%) were still under the old rental system. Out of these, a total of 3,019,662 properties were under the old rent contracts, with residential units accounting for 54% and the rest 46% for commercial and administrative uses. Furthermore, statistics revealed that there were 13 million empty housing units in 2017, which constituted 33.5% of the total housing stock, where 4 million units were locked—2.9 million owing to households possessing another residence and 1.1 million because households were living outside the country. This indicates that the housing problem in the country is not due to supply shortage, but rather to distribution and market distortion.

Egypt has also made commitments on housing rights both internationally and constitutionally. It ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR) in 1967, which through Article 11 provides a right to adequate housing. In the Egyptian Constitution, Article 78, the state is mandated to provide citizens with a right to adequate housing, clean water, and healthy food.

At present, the census committees comprising relevant governors of each governorate are demarcating the areas to implement the new rental regulations aimed at modernizing the system and balancing the interests of landlords and tenants.