Why buy property in Egypt?
At just five hours away from the UK, Egypt is a world apart. A rich culture that is steeped in history is the backbone of this nation, and the reason why tourists have been
flocking here for years. It was inevitable that the property market would follow hot on its heels, and now second-homers, retirees and investors are flooding Egypt's property
market.
Attracted by the low cost of living and year-round sunshine, many buyers are ditching traditional home buying destinations in favour of Egypt – assured by promised rental
returns. Sharm el Sheikh is renowned for its diving, El Gouna boasts a luxury marina and Hurghada has no less than eight golf courses planned – all factors which should
keep the accommodation-hunting tourists coming back again and again.
In addition, the sheer youth of the market bodes well for positive capital appreciation, while the tax situation is extremely favourable. All in all, Egypt seems to tick all the right
boxes for overseas property buyers.
Popular property locations
... if you are talking about the Red Sea coast, one of the most important resorts is El Gouna. Located around 30 kilometres from Hurghada, this purpose-built resort offers
everything the second-home buyer could wish for; 13 hotels, an 18-hole golf course, a marina, school, and hospital all compliment the expected shops, bars and
restaurants. Prices for a one-bedroom marina apartment at El Gouna start from around £130,000.
More purpose-built resorts are being built along the coast of the Red Sea all the time, each one learning more from the experiences of the
last so that the latest resorts are some of the most modern and well-designed in the whole region. Many of these resorts are around
Hurghada, the coastal town that provides much of the focus for tourists in the area. More international flights are arriving into the airport
all the time, and as the local infrastructure develops, so more tourists are attracted to the area.
Hurghada itself is one of the most important overseas property destinations in Egypt, and attracts lots of visitors of its own accord, rather
than just being an airport transit town. The sandy beaches, warm waters and diving facilities, combined with the extensive golf facilities
that are already in place and being constructed, make this a well-established destination in its own right.
At just five hours away from the UK, Egypt is a world apart. A rich culture that is steeped in history is the backbone of this nation, and the reason why tourists have been
flocking here for years. It was inevitable that the property market would follow hot on its heels, and now second-homers, retirees and investors are flooding Egypt's property
market.
Attracted by the low cost of living and year-round sunshine, many buyers are ditching traditional home buying destinations in favour of Egypt – assured by promised rental
returns. Sharm el Sheikh is renowned for its diving, El Gouna boasts a luxury marina and Hurghada has no less than eight golf courses planned – all factors which should
keep the accommodation-hunting tourists coming back again and again.
In addition, the sheer youth of the market bodes well for positive capital appreciation, while the tax situation is extremely favourable. All in all, Egypt seems to tick all the right
boxes for overseas property buyers.
Popular property locations
... if you are talking about the Red Sea coast, one of the most important resorts is El Gouna. Located around 30 kilometres from Hurghada, this purpose-built resort offers
everything the second-home buyer could wish for; 13 hotels, an 18-hole golf course, a marina, school, and hospital all compliment the expected shops, bars and
restaurants. Prices for a one-bedroom marina apartment at El Gouna start from around £130,000.
More purpose-built resorts are being built along the coast of the Red Sea all the time, each one learning more from the experiences of the
last so that the latest resorts are some of the most modern and well-designed in the whole region. Many of these resorts are around
Hurghada, the coastal town that provides much of the focus for tourists in the area. More international flights are arriving into the airport
all the time, and as the local infrastructure develops, so more tourists are attracted to the area.
Hurghada itself is one of the most important overseas property destinations in Egypt, and attracts lots of visitors of its own accord, rather
than just being an airport transit town. The sandy beaches, warm waters and diving facilities, combined with the extensive golf facilities
that are already in place and being constructed, make this a well-established destination in its own right.
| Property Investment in Egypt |
The third step is to ensure that all real estate taxes levied against the property are fully paid and up to date, while the fourth is to review and sign the sales
contract. Be aware that this contract is not legally binding unless it is bilingual. Lastly you must register the purchase through the courts – a process which costs around
£500.
Legal issues
As mentioned above, obtaining a property that has clean title can be difficult. In the past, many property transactions simply took place between the buyer and the local
landowner – without the necessary paperwork to determine who the new owner was. Thousands of other properties were handed down from generation to generation
meaning that, in some instances, around ten members of one family could stake a claim in the property’s title. In order for the sale of such a property to take place all ten
members must therefore agree. In addition, the registration process was expensive, resulting in many transactions taking place under the table. This cost has recently been
reduced, however, from 12 to three per cent so buying a fully registered home should get easier as time goes on.
You will also need to establish whether your property is freehold or leasehold. For the majority of new-builds in resort developments it is likely that they will be leasehold, with
a 99-year lease. Some older resorts may only offer 50-year leases however.
contract. Be aware that this contract is not legally binding unless it is bilingual. Lastly you must register the purchase through the courts – a process which costs around
£500.
Legal issues
As mentioned above, obtaining a property that has clean title can be difficult. In the past, many property transactions simply took place between the buyer and the local
landowner – without the necessary paperwork to determine who the new owner was. Thousands of other properties were handed down from generation to generation
meaning that, in some instances, around ten members of one family could stake a claim in the property’s title. In order for the sale of such a property to take place all ten
members must therefore agree. In addition, the registration process was expensive, resulting in many transactions taking place under the table. This cost has recently been
reduced, however, from 12 to three per cent so buying a fully registered home should get easier as time goes on.
You will also need to establish whether your property is freehold or leasehold. For the majority of new-builds in resort developments it is likely that they will be leasehold, with
a 99-year lease. Some older resorts may only offer 50-year leases however.
Egypt's property investment potential
As with any emerging market, there is no guarantee of positive capital appreciation in Egypt. Having said that, for the few years that it has been on the international radar, the
country does boast a successful track record. In fact, annual growth of between 20 and 30 per cent is often cited. In addition, low entry prices can mean that investors are
able to enter the Egyptian market on a cash basis, therefore saving thousands of pounds per year in interest rates. Rental potential is also good, providing you chose wisely,
as Egypt has a strong tourist trade thanks to its ancient culture and excellent diving. Easy access, a good climate, increased inward investment and a favourable tax regime
complete the picture. Therefore, the ‘guaranteed’ rental returns promised by many Egyptian developers are quite believable – just ensure that the asking price doesn’t over-
compensate for these in the first place.
With thanks to Buy Association
to read or print out a full version the report click here
As with any emerging market, there is no guarantee of positive capital appreciation in Egypt. Having said that, for the few years that it has been on the international radar, the
country does boast a successful track record. In fact, annual growth of between 20 and 30 per cent is often cited. In addition, low entry prices can mean that investors are
able to enter the Egyptian market on a cash basis, therefore saving thousands of pounds per year in interest rates. Rental potential is also good, providing you chose wisely,
as Egypt has a strong tourist trade thanks to its ancient culture and excellent diving. Easy access, a good climate, increased inward investment and a favourable tax regime
complete the picture. Therefore, the ‘guaranteed’ rental returns promised by many Egyptian developers are quite believable – just ensure that the asking price doesn’t over-
compensate for these in the first place.
With thanks to Buy Association
to read or print out a full version the report click here
| Some useful information from buyassociation.com (west2EAST takes no responsibility for the accuracy of the content of this guide) |
The buying process
Once you have decided on a property you will be required to pay a holding deposit
of ten per cent. Before you hand over any money, however, it is imperative that you
follow the following five basic steps. Firstly you must get your solicitor to check the
registration status of the property – a drawn-out process of around four months,
which is executed by examining the title deeds. Despite registration being a
legal requirement, only ten per cent of Egyptian homes fulfill this requirement, so if
you are buying a resale home it is best to be prepared for bad news at this stage.
Secondly, your lawyer will need to ascertain whether there are any outstanding
debts registered against the property. If there are, again, it is best to simply walk
away.