Why Invest in the Emerging Egypt Property Market

Switched On

When most people think of Egyptian property, their thoughts are usually filled with mental images of magnificent temples, richly embellished burial chambers and of course, those awe-inspiring pyramids. Recently, a new image of Egypt real estate has slowly been planting itself in the psyche of switched-on international property investors... Colin Timms of Arabian Sands investigates.

Rightly proud of its historical past, Egypt has long regarded itself as the intellectual and cultural powerhouse of the region - now Egypt aims to be the major economic player too. The Egyptian Government is also keen to portray Egypt as a modern, successful and economically go-ahead nation; so over recent years they have embarked on a drive to encourage inward investment into the country, particularly investment into Egyptian properties. In fact, so successful have the government's efforts been to date, that Egypt's economy is now only eclipsed by oil-rich Saudi Arabia in terms GDP.

Knock-On Effect

One of the main prongs of attack in Egypt's reinvention plan is a massive push to build new homes to attract overseas investors looking to buy into property in Egypt and to house the country's burgeoning middle-class. Egypt has to some degree, been inspired by what is happening in the Gulf States. The huge success of the Dubai property bonanza for example, is having a knock-on effect throughout the whole region. Furthermore, Egypt's ongoing building program is attracting many UAE venture capitalists and development companies who regard Egypt as a key investment hotspot.

So what does this mean to the potential Egypt property buyer? The recent boom in the construction of properties in Egypt offers a chance for "wised up" property investors and second home buyers alike, to get in early while prices remain incredibly low. Rental income generation (particularly for Cairo apartments), should more than cover the cost of mortgage borrowing. Currently, it is possible to buy a spacious one bedroom apartment on the upscale "Rivoli" development in Cairo for the bargain-basement price of £47,500.

Low-Cost

Another area that is attracting overseas buyers looking to invest in property for sale in Egypt is the fabulous Red Sea resorts of Sharm El Sheikh and Hurghada. The year-round sunshine, some of the best scuba diving in the world and the recent availability of low-cost flights, has led to a major construction boom in the region. With a £36,600 entry price for a one bedroom apartment at the attractive Sunrise Heights development, and the Nabq Bay Apartments in Sharm El Sheikh starting at a mere £23,500 for a well specified studio, it´s hardly surprising that news of the embryonic Egypt property market is beginning to filter through to the savvy real estate investor.

Luxor-ious

Traditionally a place for culturally hungry tourists and a long-standing venue for winter sun seeking European holidaymakers, Luxor is now stirring the interests of Egyptian real estate buyers. Although large-scale property development is fairly new to Luxor, the potential for early investors is huge. Luxor straddles the historic River Nile and is located in Egypt's archaeological heartland. The Temple of Thebes, the Valley of the Kings and the magnificent Temple at Karnak are perhaps the most the notable of Luxor's tourist draws.

Every year, hundreds of thousands of tourist visit Luxor and wherever there are tourists, there's a demand for quality rental accommodation. With this in mind, new Luxor property developments such as the Luxor Apartments - beautifully sited on the banks of the Nile and just 10 minutes from central Luxor - are definitely worth considering. Furthermore, with low-cost airlines moving into Egypt, it should be mentioned that these bargain priced Luxor properties are only a 20 minute drive from the international airport.

Opening the Way

Wherever you choose to invest in property in Egypt, there is no denying that Egypt properties are as attractively priced as anything available in the emerging property hotspots. There is also no denying that unlike say, Bulgaria, Romania or Cape Verde, Egypt has a cultural heritage that has beguiled hoards of inquisitive visitors for centuries. What is more, the Egyptian Government is firmly committed to continuing the process of liberalisation that has for the first time in the country's history, opened the way for large scale inward investment.

Although Egypt has made great strides forwards in recent years and is one of the most stable countries in the region, investing in Egypt property, like everywhere, is not without its risks. However, experienced property investors know that wherever there are risks, there are also large profits to be made. The ultra-low entry point of Egyptian real estate means that even if the nation does suffer a few set-backs, the chances of not only recouping your initial outlay, but eventually selling at a tidy profit, is a very achievable prospect.

Continuing Attraction

Currently, there are several emerging property destinations vying for the attention of overseas property buyers, although all have their merits, none have the pulling power of Egypt with its rich abundance of archaeological treasures and inspirational ancient monuments. Furthermore, those buying property in Egypt are buying into a country that will continue to attract visitors as it has done since Roman times. Egypt property also benefits from a diversity of unique locations. Whether you opt for swish city apartments in atmospheric Cairo, attractively appointed Luxor apartments overlooking the fabled River Nile, or well specified properties on the Red Sea with its world renowned diving, there's no denying that Egyptian property buyers are spoilt for choice. Not only does Egypt real estate give the buyer a wide spectrum of purchasing options, with an entry level starting around the £20,000 mark, Egypt also offers unbeatable value for money.

Here's a reminder of some of the reasons to invest in Egypt

• Favourable Tax System: There is no VAT on Egyptian property sales. Furthermore, there's no capital gains tax, no wealth tax based on the value of your property in Egypt and no inheritance tax in Egypt for UK residents.
• Location: Properties on the Red Sea have year-round rental potential. Cairo apartments, like all capital city properties, benefit from enhanced rental values. Finally, properties in Luxor will attract those with an interest in Egypt's rich history; thus, tourist sector rentals could prove very lucrative.
• Easy Reach: Egypt is only a 4 - 5 hour flight from most European capitals; several low-cost carriers are establishing air routes there.
• History: From the magnificent temples of Luxor and the evocative Valley of the Kings, to the breath-taking Pyramids at Giza, Egypt has it all. The country has, and will continue to attract hoards of culture hungry tourists.
• Buy with Confidence: Both building contractors and architects are legally liable for a 10 year period, for any building defects. This 10-year warranty is a statutory requirement. Liability is absolute and there's no obligation for the owners of Egyptian properties to prove fault or negligence by the contractor or architect.
• Mortgages: Another recent boost to buying homes in Egypt is the introduction of mortgages which are now available to Non-Egyptian property investors.
• Ultra-Low Property Prices: Egypt has the most attractively low property prices of any of the emerging real estate investment hotspots.