Egypt bucks the credit crunch and thrives as a property hotspot
Even though the credit crunch is biting hard, investors from all over the world are still making their presence known in the overseas property markets. Whether it is in Dubai or another locale, the trend for buying overseas property continues to flourish.
According to Yorkshire Bank, nearly a million Britons alone have invested in property in one part of the world or another. This does not take into account investors from America, other parts of Europe and the east.
With some destinations showing incredible returns, buyers often employ one of three different strategies. Some investors seek property for fast resale at higher prices; others are interested in buy-to-let potential. The third strategy involves holiday home purchase for long-term holding and resale down the road at a profit.
Hurghada in Egypt offers a great deal of potential for investors interested in all three strategies. This is borne out by the anticipated capital growth in the region and the steady rise of tourism within Egypt itself. Tourism grew by 7.9% in 2007 with a steady climb at least through 2017, according to the World Travel & Tourism Council. Some estimates have tourism figures doubling over the next few years.
Only a few decades ago, Hurghada was a sleepy fishing village. Today, it is known as an investment and tourism hotspot that rarely ever sleeps. Located on the balmy Red Sea Coast, the village has grown to more than 40,000 residents. Its natural beauty, climate and ever-expanding infrastructure are attracting investors from all over the world as holidaymakers put this once nondescript locale on the international investment and vacation map.
Since its discovery by investors and holidaymakers, Hurghada has undergone some major changes. The region has long been famous as an international destination for aquatic sports. Now, it is also favoured for its lively nightlife, which has been fuelled by the recent opening of a number of pubs, casinos, restaurants and clubs.
"As more attention is focused on Hurghada, new developments are paving the way for investments and to accommodate the influx of visitors" says, Shahid Iqbal of Investors Provident. "It is clear this little fishing village has become a major player on the world travel scene". He further commented, "Hurghada itself boasts 40 km of choice seashore, which is the top reason why travellers favour this destination. It is loved by the Egyptians themselves and visitors from all over Europe."
With temperatures that remain quite warm during the days and cool in the evenings almost 12 months out of the year, Hurghada is still a resort in development. Although a variety of excellent accommodations do exist in town, the popularity of this destination is increasing the demand for a wider selection. To fill the need, developers from all over the world are making their way to Hurghada.
Whilst a number of developments are already under way, the prices in this desert oasis are still quite affordable. With very promising rental and capital growth, there is no doubt that further accommodations will provide an excellent investment opportunity.
The development of rental flats is particularly attractive in this region, where tourism is constantly on the rise. Investors, retirees and holidaymakers that want something more than hotel accommodations can provide are clamouring for more properties to let, whilst developers and investors work to fill the order.
With foreign nationals now having the option to buy in Egypt, property prices have been rising consistently in the Sahl Hasheesh and Sharm El Sheikh area, and at present are almost three times greater than Hurghada.
Whilst the Hurghada property market is still developing, it is clear that capital growth will remain steady for some time. The preliminary figures for 2008 indicate a growth rate of between 15-20% for the area, as this Red Sea village transforms from a divers' haven into an international resort.
The Hurghada property market is still quite new, but the supporting factors for it are not. This unusual combination sets the market for a period of prolonged and lucrative growth, presented by a number of factors that make it very attractive for investors. For example:
- Red Sea reputation – This area is known worldwide as one of the best on the planet for diving. This ensures a steady tourist trade.
- Cost of living – The cost of living in Hurghada is very low. This makes the region not only attractive to holidaymakers, but also expatriates and retirees wanting to soak up the sun.
- Affordable purchase prospects – Since the market is still in its beginning stages, property prices here are quite affordable. The growth potential, however, is quite high and most experts do not expect prices to remain low for long.
- Regional attractions – Egypt is a dream location for many. With its ancient sites and wondrous history, visitors to Hurghada find themselves with no shortage of things to do.
- Accessibility – With its own international airport and flights from the UK taking only five hours, this is a very attractive location.
- Freehold property – Unlike the leasehold market in Sharm El Sheikh, property in Hurghada is freehold.
Add all the above to the Egyptian government's ambitious programme to boost the country's economic standing to improve the country's overall infrastructure and its communications network, it is no doubt why the developers are also working hard to ensure visitors and new residents have everything they need for an ideal stay right at their fingertips.
With the huge number of developments currently on offer in Hurghada, there are very few opportunities to purchase apartments directly on the beach.
"Take for example a apart-hotel project we are currently marketing called Marlion. Its a fully managed resort, and on this development, we are offering a 2 years renewable rent guarantee for 10 years at 10% net (backed by an international bank) with 65% finance on all units! when you think about it as an investment opportunity, where can you find such returns in this economic climate?", Mr. Iqbal commented.
He went on to add, "Not only that, owners get to use the apartment as well, and you can purchase a unit here for under £30,000. This just shows Egypt has lots to offer investors and holiday makers alike, and I believe it truly is a fantastic investment hotspot."