Property in Egypt
According to the Egyptian Tourist Authority, (ETA), the number of tourist arrivals in Egypt almost trebled between 2001 and 2007, from 4.7 million to 11.1 million. Over the past two years the Germans and particularly the Russians have been flocking to Egypt en masse and now outnumber UK tourists. In fact, six countries from Central and Eastern Europe increased their tourist arrivals in Egypt by over 50 per cent in 2007 and as people from the likes of Poland, Ukraine and Slovakia get wealthier it appears Egypt is becoming a main beneficiary.
Tourist numbers are therefore expected to continue rapidly increasing, they increased by 22 per cent in 2007, and the ETA is targeting an increase of 5 million more visitors a year by 2014. Budget airlines started flying to Egypt in March 2008 and EasyJet offers return flights from London to Hurghada for just over £200.
Tourism growth is increasing demand for well-located Egypt property in the most popular resorts and prices for property in Hughada range from £15-30,000 and property in Sharm el-Sheikh £25-35,000, with most UK buyers paying cash although some local banks will lend up to 80 per cent LTV to foreign buyers.
Due to the year-round nature of the holiday season and the fact that Egypt property prices are so low, the rental yield for a well-marketed property should exceed 10 per cent. Property investors should therefore be weary of accepting rent guarantees of seven per cent for 10 years, for example, as the extra profits from rents achieved may go in the developers pocket and not yours. Other developers offer 5 per cent for two years then 10 per cent for a further three years and there are countless variations designed to entice you to buy.
Egypt property prices increased nationally by around 15 per cent in 2007 and because prices are still so cheap the Egyptian property market is not expected to be negatively affected by the credit crunch, unlike many other international property sectors.
However, if you decide to invest in property at an Egyptian tourist resort you should be aware that a major terrorist attack, like the one that took place in Sharm El Sheik in 2005, will have a negative impact on foreign visitors and the country’s economy. For example, after the Sharm El Sheik attack in 2005 tourism growth slowed dramatically and didn’t start surging again until 2007.
Foreign buyers do not have to pay any property taxes.
First published in February 2009.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
See Also: Egypt (6)
Related News
