New & Original Content - Page 3

Peter Mitry · #21 26-07-2007, 10:34 PM

We hear a lot on the forums about what new developments are taking place but no too much about the actual places where we might consider investing our hard earned cash. For my money, Hurghada takes some beating. The local council have invested millions in new roads and new pedestrianised shopping and leisure areas and the following description of the area justifies it's attention as a top property investment destination.

The city of Hurghada is one of the best know coastal cities in Egypt. Mainly if the intention is to do leisure activities in the water. Located in the southeast of the country, on the shore of the Red Sea, there are over 20 kilometres of beaches there. The different tones of blue of the sea, which range from dark to turquoise, attract the attention of visitors.

The city of Hurghada was established in 1950, a time in which it was no more than home to a few fishermen. Starting in 1980, however, the city started attracting the attention of large investors in the tourism sector and they transformed it into one of the most beautiful coastal cities on the Red Sea. Situated 385 kilometres south of Suez Canal, the city of Hurghada is the centre of a whole tourist region.

"A series of leisure activities are proposed to local visitors. The main one is diving", explained Aziza Osman, of the Tourism Office at the city. This sport is not, however, the only sea activity practiced in Hurghada. The city is renowned worldwide for other sports like windsurf, sailing and deep-sea fishing.

"In truth, the fact that the water on the coast of Hurghada is naturally warm causes the sea to be ideal for the breeding of rare fish and for the growth of coral reefs of incomparable beauty," stated Hanz Weber, a German tourist who has been visiting Hurghada regularly for almost 15 years.

According to him, the authorization of an excessive number of tourist complexes has affected the reefs, but the government of Egypt, according to Weber, has become aware of the matter in recent years, considering the effects that disorganized urbanization can have on nature.

The climate in Hurghada is very dry. The temperature reaches over 35 degrees Celsius in the summer. In winter, the temperatures range from between 12 and 15 degrees. Autumn and winter, however, are the favourite seasons for visitors to Hurghada.

Hurghada is divided into three main regions: Al Dahar, is the older area where the city centre is located. In the region there are bazaars, bus station and the post office. Sekkala is the second region, much more modern than the first, where there are hotels, but not the best. The third part of the city is the most modern, where Al–Korra Avenue is located, and where the most sophisticated hotels may be found.

On visiting Hurghada, tourists may visit sites like the neighbouring Charm Al Naga, 40 kilometres away, where the most beautiful coral reefs in the region may be found. And just 25 kilometres away from Hurghada may be found the famous tourist redoubt of Al-Gouna, with its 14 international hotels and its two ports with capacities to receive yachts from the Mediterranean and Indian Ocean.

In the Al Mahmya region, 45 minutes away from Hurghada by boat, on the island of Giftune, visitors may see untouched coral reefs through crystal clear seawater.

Assets

But the city of Hurghada does not only offer tourists the possibility of nautical activities. The riches of the historical assets of the area also attract great interest. There are from ancient monasteries of Saint Anthony to Saint Paul to monuments of the Greco-Roman period, on the top of Gabal Al Dokhan Mountain, which means "Mountain of Smoke".

Finally, for those who enjoy nightlife, the city of Hurghada also offers options. Visitors may have fun at discos and clubs, watch Arab folkloric dance festivals and also Nubian groups, from southern Egypt.

To reach Hurghada it is necessary to drive for six hours or fly 40 minutes, leaving from Cairo airport. The city has an international airport where flights from many European airports arrive.

alison9071 · #22 04-08-2007, 11:08 PM

there is no history of re sales in hurghada because this is a developing market, hurghada is 50 km long and the whole city is for sale.

Any developer worth his salt will not re-sell until he has sold his own stock.

This is very much a speculative market with re-sales dependant on the marketing ability of the owner.

take a mid to long term view and you will win

there is no 'hit and run oppourtunities' here it is purely mid to long

andy

Peter Mitry · #23 05-08-2007, 09:43 AM

Andy's comments are generally true; I believe there are around 175,000 apartments currently under construction in the Hurghada area and Developers will always sell their new stock first. However, consider why these units are being built? One reason only; it is an expanding market, many people wishing to buy holiday homes and others looking for a safe haven for their hard earned cash. BUT this is an embryonic market, not an established one like in the UK where if you put your property on the market you exopect a sale quickly. As an Investor myself I see the Red Sea Coast as a five year hold - during this time you will see phenominal improvements in infrastructure and facilities and prices will go up. If you need to finance your purchase in the meantime consider whether you can afford to make mortgage payments with or without the rental income. If the answer is 'no' then consider whether you are making the right decision.

Like in every market their are different options; if you buy in the town, with no security and limited facilities you will pay less money. You may or may not have nearby beach access, as in Egypt beaches are mostly private or are designated 'public' beach areas. Sometimes this is a good option, it doesn't need financing and you buy it and wait for the market to develop.

If you are in a front line beach project with private facilities and in a gated community you will be more secure and will have more entertainment, shops & restaurants which many will consider makes this an attractive option. Many will consider that this is worth the higher investment. But even here their is a hierarchy; absolute front line beach will always be at a premium and will always be the easiest to rent out for the most money. Why? Because there will always be people who demand the best and are prepared to pay for it.

In this instance, Developers wishing to sell only their newest releases will take a backseat. There will only ever be a finite number of absolute front line properties and most Developers will be happy to sell these over and over again. These are the properties I invest my money in; I am not a gambler, I only back favourites and these 'blue chip' locations win every time for me.

dave99 · #24 07-08-2007, 06:15 PM

Not sure why there is a note about 6 hours drive to get from Cairo. We will all be flying in from the UK taking about 5 hours.

dave99 · #25 07-08-2007, 10:45 PM

I too read this post and thought - this looks like bad news - or is it.

It got me worried particularly about the 5 year rule on registered properties being sold on. IT will be good to see a more easily understood version

dave99 · #26 07-08-2007, 10:51 PM

Peter.
Having been through many of the thread on here today I would like to understand why almost everything has to someone get around to mentioning Sahl Hasheesh in your replies.

seamstress · #27 09-08-2007, 06:19 PM

lets face it ,it will be five years before anybody really gets settled over here. it has to be good news just for the fact the government is taking an interest

dave99 · #28 10-08-2007, 10:26 PM

Not all bad news. Apparently there is an acceptable workaround as long as you do NOT register with the land registry.

Peter Mitry · #29 27-08-2007, 04:44 PM

EGYPT - INVESTMENT POTENTIAL 2007
With strong long-term economic growth, decreasing inflation, and an
upsurge in both demand for short-term rental accommodation and
second properties, Egypt is proving that it is more than just the home
of ancient culture and the Pyramids. Among the many factors joining
together to make Egypt a hot prospect for the property investor is the
record number of visitors that the country is attracting.

The number of tourists in Egypt almost doubled between 2001/02 to
2005/06 and Egypt’s prominence in the tourist market is set to continue
with progress towards a further doubling – to 16 million visitors – by
2014. Revenue from tourism has grown hand-in-hand and in the last
financial year tourist income stood at $7,235m, nearly 10% of the
country’s GDP. The World Trade Organisation (WTO) has projected that
tourism growth will continue at a consistent rate of 6% each year.

Of the many examples of anecdotal evidence of this growth was a recent
article in The Times newspaper. The German travel group TUI (before its
proposed merger with First Choice Holidays) reported that its customer
numbers had risen by 5.1% and specifically that: “summer bookings to
Spain had declined while Greece and Egypt were up.”

The successful tourist market has been assisted by the high-profile
activity of the Egyptian Tourism Authority, which has included a big
marketing campaign in anticipation of this year’s northern winter season
and, following up its success with the ‘Red Sea Riviera’ campaign, ‘The
Gift of the Sun’ initiative has been launched across Asia, Europe and
North America.

This initiative was backed by the Egyptian Minister for Tourism
himself and was yet another sign of the pro-active stance taken by
the Egyptian government in promoting tourism, along with developing
the infrastructure of resorts and training the tourist workforce, which
represents 12.6% of the labour force available in Egypt.

Furthermore, Egypt’s Prime Minister has underlined the intention for
Egypt to become an ‘investment hub’ for foreign investors, particularly in
major infrastructure sectors. Meanwhile, at a recent ‘Middle East Travel
and Tourism’ summit, the importance of private-public partnerships
was underlined (with particular reference to Egypt) to an audience of
over 400 leaders of the international tourism industry.

The number of tourists in Egypt almost doubled between 2001/02 to 2005/06 and Egypt’s prominence in the tourist market is set to continue
with progress towards a further doubling – to 16 million visitors – by 2014.

Egypt – 2007
As a result of this concerted effort, the appeal of Egypt has widened
away from its traditional, historical, lure as ‘the land of the Sphinx’ to
being recognised for its varied tourist appeal. It is becoming known for
city breaks in Cairo, for pursuits such as diving in its popular Red Sea
resorts, and for celebrity golfing holidays at resorts like The Cascades
in Soma Bay. The Cascades course was designed by golf legend Gary
Player and has been ranked in the top 10 courses in the world by the
readers of Golf Journal. It is located just 45 minutes from Hurghada
International Airport with direct flights under 4 hours from the UK.
The Cascades course is a prime example of a modern world-class
attraction, and just one of the many reasons why tourists will visit and
re-visit the country. In the spirit of Egypt’s modern, forward-looking
tourist effort the opening of the newly refurbished Cairo international
airport is set to attract yet more visitors to complement Egypt’s new
look 21st century tourist industry.
Naturally the Egyptian Government’s positive action in the area of
tourism has run parallel to economic reform and growth. The Egyptian
economy’s sustained strong performance over the twenty-year period
between 1980 and 2000 was given further impetus by recent widereaching
reforms carried out by the Government, which has enjoyed a
period of continuity and stability.
Source: IMF (International Monetary Fund)
In the context of an exchange rate stage stabilisation and tightening of
monetary policy, inflation fell dramatically to around 4% in 2005 from
18.1% in 2004, and came in under 4% the following year. Meanwhile the
growth in GDP has nearly doubled from just over 3% in 2002/03 to over
5.5% in 2006/07. In order to maintain the current favourable conditions
the government has planned growth to be sustained by at least 6–7
percent, and that total investment will need to reach about 25 percent of
GDP, well above recent levels of around 18 percent of GDP.

Egypt - 2007
Source: IMF (International Monetary Fund)
The ‘feel-good’ factor engendered by upward economic trends and tourist
numbers has inevitably had a positive knock-on effect on real estate. Investment in Egyptian property is offering great opportunities for purchasers especially at this early stage of the vibrant fledging market. There is increasing tourist demand for short-term rental accommodation in the resort areas on both the Red Sea and Mediterranean coasts and property investors have enjoyed the best rental yields in the country from their activities here.

Meanwhile, as more overseas buyers seek holiday homes and second homes
in these resort areas the second home re-sale market has started to show profit potential over and above the initial capital outlay. Egypt’s proximity to the European mainland and renewed tourist infrastructure mean that this market keeps on growing as holidaymakers see the potential for owning another property in an attractive, exotic location.

Aside from the resorts, the majority of real estate investment takes place in the major cities such as Cairo and Alexandria where overseas property investors are overseeing the development of luxury residential areas and consequently generating strong international interest in the market. No wonder, as these major cities are currently attracting as much as 25% annual capital growth.

The demand for property on the coast and in the cities, where there is a shortage of accommodation, and the subsequent ever-widening profit margins are set to continue due to a whole range of factors and benefits. The availability of infrastructure, low cost of living (therefore low costs of property management and maintenance), low prices for the investor and the introduction of mortgages for foreigners in Egypt, have all combined to make conditions more than favourable.

Furthermore, the abolition of a bundle of red tape measures relating to tourist
activity, an easy-to-follow tax system and the absence of any inheritance or capital gains tax for foreigners are added incentives to Egyptian property purchase.

With all of the factors coming together, underscored by the most stable economic conditions in years, it is hardly surprising that the increasingly popular holiday destination of Egypt has become a natural magnet for foreign real estate investment.

Egypt’s proximity to the European mainland and renewed tourist infrastructure mean that this market keeps on growing as holidaymakers
see the potential for owning another property in an attractive, exotic location.

The availability of infrastructure, low cost of living (therefore low costs of
property management and maintenance), low prices for the investor and the introduction of mortgages for foreigners in Egypt, have all
combined to make conditions more than favourable.

Egypt - 2007
PURCHASE PROCESS
Below is the standard purchase process in Egypt, and issues that may affect that purchase:
■ Even though many Egyptian properties are unregistered, registration is an essential pre-requisite to a purchase.
■ Foreign ownership is limited to two residential properties per family, with a combined area not exceeding 4,000 square meters or within a historical site. (There is a resale restriction of five years , although exceptions can be applied for)
■ A lawyer’s service is essential when liaising with the Real Estate Registration
Office to register the property and ready it for foreign purchase.
■ The registration process may take up to 4 months.
■ Registration is complete after inspections are made and any payment of taxes and/or fees is made.
■ A holding deposit is payable once the property is decided upon; that will take it off the market and start the contract process.
■ It is advisable to have a lawyer conduct searches and advise on the legality of the purchase, even if the property is brand new and being purchased from an established developer.
■ Mortgages in Egypt, as is the case of most emerging markets, are in their infancy. However, as the market matures, the financial facilities will increase for overseas investors.

Costs of a standard property purchase in Egypt include the following:

■ Low off-plan prices, from £30k for a beachside apartment.
■ Property registration and legal fees for conveyance total around 6%.(Some developers include the cost of conveyancing)
■ However, in Egypt there is no stamp duty or capital gains tax payable on real estate.
■ British residents will avoid inheritance tax on any Egyptian properties passed on to relatives and partners etc.
■ The buyer pays a nominal inspection and measurement fee of around 65 Euros.
■ Tax on income from the property amounts to 20% to 22%, an alternative VAT.

Veronica · #30 30-08-2007, 04:37 AM

is there a new law regarding foreigners not being alllowed to own land in south sinai, that does not sound like egypt wants investors.