NOt just supply and demand
Developers in this market (Hurghada) may be quite different to other parts of the world (for which I cannot offer guidance), in that it seems to be the "norm" to start with very low prices that probably will not even cover the cost of the first few units sold as a way to get sales moving, and to get the cash flowing.
It's no big secret that there is a lot of sense for developers to use the money from deposits etc to part fund a development - if this is not done then the developer has to maybe borrow and pay interest until the cash comes in. If the project is over 2 years or so that's a bit of a risk for buyers therefore they have to decide if the level of discount being offered if a good deal or not.
During the build phase prices go up for a number of reasons, significant cost increases, specification changes, planned increases in line with reduced discounts as the risk is reduced for the buyers.
The whole process is not one of increasing prices just because there is an increased demand - it is all about a planned profit margin that builds in the process described above.
There is a potential risk to both parties, each one having to decide how best to make it all work.
Where arrangements are made for a sort of "draw down" from a secure fund of owners money this is not much different to the sort of payment schemes listed on another thread - being stage payments.
The biggest winners are always the ones who take the biggest risk, and buy before the work on a plot begins - in the current market with currency changes and cost increases anyone who has already contracted to buy is on a real winner - new projects could cost far more than those now in build.
Most agents are well aware of this in this part of Egypt.
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