Modeling housing supply and demand using system dynamics

Purpose The housing sector in Egypt represents a considerable share of the gross domestic product (GDP) and accordingly the economy. Further, it is considered vital for any population around the world, because it provides the shelter needed by people. Egyptian housing market is facing many problems which need to be solved. The paper aims to discuss these issues. Design/methodology/approach This research reviews and analyzes the Egyptian public and private housing market’s key variables. As such, it highlights the importance of informed decision making through detailed analysis and study of the market, especially when planning for the future by any housing market stakeholder. The research proposes the use of system dynamics (SD) modeling to analyze the market by creating a stock and flow model using STELLA modeling and simulation software. Findings The results reveal that the expected newly established families will be nearly 800,000 families in year 2015/2016. Out of these numbers, 600,000 families require economic housing units, while the expected supply is nearly 300,000 units. Originality/value A study is made for the economic housing market, which is a very big housing market and population segment that has been suffering from negligence for years.