I don't think that you will ever find a fixed formula that says something like, for every 100m away from the beach you are, deduct 10% from the asking price.
In general though, property is a commodity like gold, oil, pork bellies or yen and thus is subject to the laws of supply and demand.
The thing to note, especially with relation to Hurghada, is that supply of beachfront is very limited already as the resorts have taken most of it already, whereas the amount of land to build upon inland is, to all intents and purposes, infinite.
Fast forward a decade and Hurghada will be massive if it goes the same way as the Spanish, Turkish, Moroccan etc. resorts, etc. and I can see that, at some point in time, there will be an oversupply in the market. Tourists are naturally going to want to be as close to the beach as possible - ideally directly on it. When this oversupply situation occurs, there will still be rental business for the beachfront properties, but those that are maybe 1km from the sea are going to be struggling.
I think it's natural to try and buy as cheaply as possible, but I think that it's false economy because of the supply and demand situation. Maybe beachfront in 'Greater Hurghada' is 30% more expensive than the equivalent apartment in downtown Hurghada. I think that this is probably justified.
You've given me the idea for a future blog entry - I would like to compare ratios of beachfront versus non-beachfront with established resorts such as the Costa del Sol and see how the ratios compare to get a feeling as to how prices can be expcted to grow in future. Now all I need is some free time to research it!
|