The recent media reports relating to the real estate market in Egypt paint a picture that would make anyone think twice about buying property anywhere else. Even the Prime Minister of Egypt believes that the construction industry has just witnessed a 15% expansion. But are all these tall tales about the success of the Egyptian property market too good to be true, or do they illustrate a picture of an investment asset that really is too good to miss?
The thing with Egypt is that it is an undeniably amazing country in terms of its travel and tourism appeal. It’s not like the authorities, tour operators or property professionals have got to flog a semi-decent location like Bulgaria is it?! Egypt has year round sunshine, it has the Red Sea, it has incredible beaches, it has the pyramids, Cairo, Alexandria, Tutankhamen – I mean, it has it all in abundance! And what’s more, the tourism industry is truly thriving…up 20% in 2007 on 2006 levels, set to increase by about 7% on average a year for the next ten years, and being targeting for inward investment by the government seeking to stabilise and diversify its economy.
So, the fact that the entire fledgling real estate industry is built on tourism makes property in Egypt initially seem like a no lose commodity. Surely as tourism numbers rise and rise and rise and all these amazing developments in all these amazing resorts are built and sold, so those who buy will be able to let to the tourists coming in and profit right? Well, yes…and no. What about all the hotels in Egypt? And all the hotels that are being built in Egypt? And the fact that tourists still prefer hotels with all their facilities and conveniences to self-catering? Aye, there’s the rub, not every tourist visiting Egypt is going to want to rent a fly-to-let investment property belonging to someone from the UK who has invested their life savings into what is being oversold as an amazing investment asset ‘guaranteed to double your money, honest.’
Sorry, we got carried away – it’s just that we despair when we see developers advertising properties for sale in untried and untested emerging markets with ludicrous promises about guaranteed rental yields, guaranteed capital appreciation and guaranteed returns. Yes Egypt is potentially a great place to invest, yes there are amazing fundamentals supporting the development of the nation economically speaking…but come on, it’s not a sure bet. Please, proceed with caution and look at any investment opportunity with just a little suspicion if you want to do the best for your money.
Wednesday, July 30, 2008
Now is the time to buy property in Egypt according to analysts
Egyptian Property: Too Good to be True or Too Good to Miss?