New & Original Content

[Peter Mitry]

All of us involved in International property investment are constantly facing the same big question. Where can we invest and expect to see strong capital growth with a reasonable expectation of strong rental returns to minimise our costs and reduce our short to medium term exposure to risk?

This new section on Egypt is intended to stimulate contribution from both new and experienced investors and your views are strongly encouraged. The following report from Amberlamb is intended to provide interesting background reading to encourage informed comment and debate. We want to hear from those of you who are considering expanding your portfolio into the Egyptian market or who are considering doing so. If anyone has negative experiences then of course we need to hear those too.

[i]Property in Egypt in 2007 an Interesting Investment Choice

All eyes are on Egypt and its economy at the moment as the Egyptian government continues its aggressive series of reforms designed to boost foreign direct investment, reduce a budget deficit, improve the lives of Egyptian people and ensure the nation performs to the best of its ability and is accepted globally by more nations as a trading partner and viewed as a politically and economically solid nation.

Property in Egypt in 2007 will represent an interesting investment choice and 2007 is likely to be one of the best years for investors to bag bargains in this emerging market that will reap them substantial capital appreciation and rental returns over at least the medium term.


At the moment investors committing to Egyptian property are purchasing at a time when many prospective future buyers of resale stock or renters of investment properties still consider Egypt a less attractive emerging nation to commit to. Egypt still suffers unfairly from a reputation earned by previous governments as a nation unwilling to negotiate with the likes of US and UK and a country with unaddressed poverty issues for example. But so much has changed in Egypt in an incredibly short period of time that this old attitude will erode and be replaced by an understanding of what Egypt has become – namely an astute nation working hard to attract investment, to boost the economy and the prospects of the local people and a country in which many Middle Eastern investors are already committing billions of dollars to a burgeoning real estate market.

In 2007 this perception of modern Egypt will disseminate and the attraction of the nation in terms of its climate, history, natural landscape and cheap property prices will fuel demand for second and holiday homes as well as retirement properties and holiday villas and apartments to let. Furthermore in 2007 tourism arrivals in Egypt will start a pattern of increase which, according to a special report into the effects of Egypt’s liberalisation of aviation accessibility by the World Travel and Tourism Council will only be the start of a surge in inward flow of travel and tourism demand. International arrivals in Egypt are expected to increase to 13.4 million by 2011, boost tourism generated GDP by 12% by 2011 and generate over quarter of a million new jobs in Egypt in the same period of time and 2007 is when this increase will begin.

An investor who wants to be first into this emerging market has been pipped to the post by the likes of the UAE’s Emaar Properties, but rest assured developers such as Emaar are producing the properties that will generate investors who buy in Egypt in 2007 the strongest returns possible. Emaar are already firmly embedded in the likes of Cairo, and DAMAC Properties, the Middle East’s largest private sector luxury property developer is the latest in a long line of names to agree terms with the Egyptian government for the construction of amazing property developments across the country.

DAMAC are to construct a 320 million square feet development comprising 55,000 housing units across nine distinctive residential zones over the next ten years and plough billions of dollars of investment into this, their Gamsha Bay project at the north of Hurghada.

According to a recent version of the CIA world factbook, Egypt needs to concentrate on attracting FDI – well, by focusing on the real estate sector Egypt is certainly managing to achieve significant foreign direct investment increases which bodes exceptionally well for the long term prospects of the nation – an important factor for an investor to consider when wondering about how long to commit to Egypt for. While Egypt’s new property market may be emerging and about to witness strong price gains, it is a market with all the right ingredients for long term success and therefore property in Egypt in 2007 makes an exceptionally interesting investment choice.

Lets hear from the wordsmiths amonst you; do you agree or disagree? I have already invested strongly in the Sahl Hasheesh Resort near to Hurghada. I firmly believe prices will double within three years as the public realise that just five hours from most major European capitals they can be basking in sunshine 365 days a year, enjoy some of the best diving in the world, play worldclass golf on the superb courses that are springing up everywhere and enjoy the genuine warm hospitality of the Egyptian people who mostly speak our language.

I look forward to hearing your views....

Peter Mitry

[orosurf]

I hope to be visiting the Sahl Hasheesh site very soon.Do you have any information on the "tax incentives" currently being offered by the Egyptian Govt.?As I understand it investors will not be liable to pay taxes on the sale of their properties for 10 years,is that correct?

[Peter Mitry]

Welcome Orosurf! In order to encourage inward investment the Egyptian government have created a very favorable tax environment for overseas investors. There are no purchase taxes, no inheritance tax and no capital gains tax for at least 10 years. At this point I have no knowledge of what happens after that and would welcome contributions from anyone with more in depth information.

[orosurf]

That is what I heard.That should be very attractive to investors particularly those buying off plan with the intention of selling before completion.

[Peter Mitry]

It is good to see more people contributing to this forum but we should try to ensure that it remains objective and not just a means of advertising for those working in the property industry. To stimulate debate I have summarised below a few of the reasons why I believe Egypt & the Red Sea are poised for huge development.

Egypt Investment Growth

Egypt has long been a popular travel destination. Today, due to encouraging economic trends, the property market in Egypt is becoming more popular as a location amongst worldwide purchasers and recent years have seen a growth rate of an encouraging 20-30% per annum in some key locations.

Property investment in Egypt, as in many emerging markets, relies heavily on the success of Egypt’s ever increasing tourism industry. Beautiful, well established tourist hotspots are already in existence, particularly along the Red and Mediterranean Sea coasts and cater for a wide variety of modern tourist requirements, from excellent diving and snorkelling, five star hotels and golf courses to cultural and historical activities.

New off-plan opportunities from heavy weight international developers are now springing up, attracting overseas investors looking for a secure investment with good growth potential at rock bottom prices. Due to increased tourist numbers, these buyers are also safe in the knowledge there will be a strong market for their investment. Furthermore, the imminent opening of the newly modernized Cairo international airport in early 2007 is set to bring a new influx of visitors to complement Egypt’s new look 21st century tourist industry.

Egypt’s Prime Minister, Ahmed Nazif is concentrating on the country’s potential as a promising investment hub, especially in major infrastructure sectors, which will inevitably have a direct result on the attraction of Egypt to foreign investors. During the Middle East Travel and Tourism Summit of 2006 in Jordan, Munir Nassor told more than 400 leaders of from the international tourism industry that Egypt and the Middle East as a whole, can expect to attract new investment in the hotel, spa and airport sectors. He added, “The cooperation we’ve had so far between private and public sectors is giving the right kind of push forward”.

Due to recent reforms to streamline purchasing procedures in Egypt, the country now attracts more overseas property purchasers than ever before. This can also be put down to its relatively simple purchase system with lower taxes than in many other countries and no capital gains or inheritance tax.

Capital Growth Predictions

Based on a steady increase in investments in the tourist sector and a resulting surge in visitor numbers, Egypt offers promising growth potential to all types of investors, while some areas of the Red and Mediterranean Sea coasts as well as certain areas of Cairo and Alexandria, are currently attracting as much as 25% annual capital growth. Investment in Egyptian property is offering great opportunities for purchasers while it waits during the infancy of an exciting emerging market.

Rental Yield Predictions

Rental income from Egypt based property is of great interest to investors as high rental yields are already achievable from property located in the current tourist hotspots. It is expected that mortgage payments and bills can be covered for the year from the rental income achieved. A fantastic year-round climate attracts a reliable tourist trade throughout the year.

Egypt Economy

Egypt’s economy is undergoing steady growth and in the last quarter of 2005 the annual growth rate in Egypt has risen for the first time to 6.1% and inflation dropped dramatically from a huge 18.1% in 2004 to only 3.1% in 2006

Due to a number of economic reforms, private business has increased to represent some 80% of the economy today. Experts agree that the current economic climate should improve the economy of the country, create more opportunity for employment and domestic wealth growth, and increase the attraction of the country from an overseas investor’s point of view. With direct foreign investment continuously on the up, Egypt’s economy shows enormous potential over the long term.

Reasons Why Egypt is an Intelligent Property Investment Location

•  Low property prices starting at around £30k
•  Year-on-year capital appreciation of between 20-30%.
•  Beautiful, well established tourist hotspots suitable for varied tourist interests, from excellent diving and snorkelling to cultural and historical locations
•  Stunning natural and unspoilt landscape
•  Steady annual growth in tourist figures
•  Less property tax than paid in the UK.
•  No capital gains tax
•  British residents avoid inheritance tax on any Egyptian properties
•  Warm desert climate with temperatures ranging from 14°C in winter to 30°C in summer
•  Year-round tourist season
•  Politically stable country
•  Strong economic growth and inward investment creating a rich investment climate.
•  Well renowned developers creating luxury resorts to cater for Egypt’s new influx of international tourists
•  Easy air access from many European destinations makes Egypt an ever popular medium haul holiday location
•  Cairo International airport is being modernized and a new terminal is to be built by early 2007
•  Relatively low cost of living and maintenance costs
•  English is widely spoken, after Arabic

It would be great to hear from Developers involved in the planning of projects in Egypt and from Bankers or other Financial Institutions who will provide funding for construction and mortgages for potential buyers.

Lets open up the debate and try to get a wide range of views. What do Egyptian Nationals think of what is happening and how it will develop in the future?

If anyone would like to see where I have invested please take a look at the following link and PM me if you need more information.

Sahl Hasheesh - luxurious Villas and Apartments in Eygpt

[Goldberg Global]

Yes, looks like alot of people are getting their teeth into this development. Still I am quite bullish on this one. Alot comes down to marketing (if you are a single unit buyer or multiple unit buyer, if you want yields.) and the tax benefits are good. Lets hope it does not become saturated. But Egypt in preference to other north africa places. Anyone shopping in Algeria or Libya? Thought not.

[Peter Mitry]

There is a good old barber in some city in the US. One day a
florist goes to him for a haircut.
After the cut, he goes to pay the barber and the barber replies:



"I am sorry. I cannot accept money from you. I am doing community service."


The Florist is happy and leaves the shop.
The next morning when the barber goes to open his shop, there
is a thank you card and a dozen roses waiting at his door.




A policeman goes for a haircut and he also goes to pay the barber after the cut. But the barber replies:

"I am sorry. I cannot accept money from you. I am doing community service.

The cop is happy and leaves the shop. The next morning the barber goes to open his shop, there is a thank you card and a dozen donuts
waiting at his door.







An Egyptain engineer goes for a haircut and he also goes to pay the barber after the cut. But the barber replies:
"I am sorry. I cannot accept money from you. I am doing community service."
The Egyptain engineer is happy and leaves. The next morning
when the barber goes to open his shop, guess what he finds there...




Can you guess? ??






Don't you know the answer yet?






Come on, think like an Egyptain











A dozen Egyptians waiting for a haircut..!!



The moral of this story?


Let's see if we can find a dozen Egyptians to contribute to this forum and tell us more about their great country......

[alison9071]

hi peter it is alison here we met last week at the intercontinental property expo in hurghada very good joke i will use it in the future

i have joined the forum today and i am very impressed thank you for the tip
how did the expo go for you was it very productive ? we enjoyed and look forward to doining a place in the sun in september so maybe we will meet again there

i have given andy your card i think he will be in touch soon hope that is ok

it was nice to meet and look forward to seeing you soon

alison harris property hotspots

[Peter Mitry]

Originally Posted by alison9071

hi peter it is alison here we met last week at the intercontinental property expo in hurghada very good joke i will use it in the future

i have joined the forum today and i am very impressed thank you for the tip
how did the expo go for you was it very productive ? we enjoyed and look forward to doining a place in the sun in september so maybe we will meet again there

i have given andy your card i think he will be in touch soon hope that is ok

it was nice to meet and look forward to seeing you soon

alison harris property hotspots

Hi Alison it was nice meeting you; I am still in the UK and will be back in Spain tomorrow. I had a great week; it started as holiday but I had visits from 5 clients which kept me busy. Glad the show went well for you. We did well also including several new agents visiting from key markets. I think being the first one everyone was a bit unsure how it would go. I look forward to hearing from Andy...

[Peter Mitry]

Since starting this section earlier in the year its great to see so many new contributors joining in. What is even more encouraging is seeing prime time advertising for Egypt on UK TV. Maybe the budget flight operators will begin to take notice! It is unbelievable that British Airways cut their Thursday out Saturday back flights to Hurghada during the Summer season. My company plan to take 1000 couples to Hurghada on Inspection flights this year. Any budget flight operators out there want to offer us a deal?