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Where to Invest in the Egyptian Property Market in 2011?

Today, we take a look at Egypt where the new progressive economic policies have resulted in large-scale investment in property from overseas buyers.
Mark J. Burns | 24.08.2011
The past three years have seen considerable changes in the overseas property industry, as the global economic climate brought upon us an economic whirlwind of events which have arguably changed the way we view overseas investment in the future. Movements away from the more traditional Euro-zone destinations have been coupled with a shift towards the new and emerging markets such as those of Egypt and Turkey, where strong economic performance offer the potential for considerable long term returns. Today, we take a look at Egypt where the new progressive economic policies have resulted in large-scale investment in property from overseas buyers.

The Egyptian property market has developed at an almost unparalleled rate over the course of the past three years, predominantly on the back of a huge increase in tourist visitors to the country from destinations including the UK, Russia, Germany, France and Scandinavia. Large-scale investment in tourist infrastructure, particularly throughout the more popular Red Sea resorts, is today beginning to pay dividends as increasing numbers of visitors travel to destinations including Sharm El Sheikh, Hurghada and Marsa Alam.

With many people now seeing Egypt as their favoured investment destination in 2011, many people are now asking themselves where is the best place to buy property in Egypt, and where will offer me the best long-term returns on investment? In order to answer this question, it is important to look at the individual destinations and their relative merits, particularly with a view to the impending investment which is likely to come over the next 5 to 10 years.

The Egyptian tourism industry has seen considerable success over the past five years, however it could be argued that this growth has been particularly focused around the Sharm El Sheikh area, on the southern tip of the Sinai Peninsula. This beautiful, and increasingly popular resort has seen substantial investment at the federal level in recent times, and with talk of a second runway at the international airport now taking place, it seems likely that this investment will continue in the near future.

Understandably, being such a popular tourist destination, there is a huge demand for property in Sharm El Sheikh. However, with the central Naama Bay region being already built up, the new development and investment is in fact taking place just a few miles north in Nabq Bay. Here, a number of excellent new property developments have been announced in recent times including The View, Viva Reef and the Mashareq, all of which have proven commercially successful with the overseas investors. It is however still early days in Nabq Bay, and just a short drive through the resort shows the huge potential for investment and growth over the course of the next few years. Infrastructure is already in place, and being just a short drive from the airport it is likely that demand for property in Nabq Bay is set to continue for the foreseeable future.

Just a short boat ride across the Red Sea, takes you to the increasingly popular resort of Hurghada on the Egyptian mainland. Arguably the rising star of the Egyptian property market, Hurghada is quickly beginning to rival the popularity of Sharm El Sheikh. With the neighbouring resorts of El Gouna and Sahl Hasheesh, Hurghada is able to offer an unparalleled level of opportunities for people wishing to buy property in Egypt. From the spacious apartments in central Hurghada, which start from as little as £6,000, through to the luxurious villas of the Sahl Hasheesh, there is genuinely something for everyone on this beautiful stretch of Red Sea coastline.

Similar to the market in Nabq Bay, many see Hurghada and the surrounding regions as being in the formative years of their development. Whilst the resort has undoubtedly moved on from its origins as a quiet fishing village, today there is still considerable opportunity for investment in Hurghada, and many of the property developments of still being offered at an off plan to stage.

Further down the coast lies the less-developed resort of Marsa Alam, where many overseas investors are seeking to capitalise on its huge potential for growth over the course of the next ten to fifteen years. Undoubtedly behind the other major Red Sea resorts, Marsa Alam is arguably still at an embryonic stage of its development. However, as with so many markets, being at such an early stage means there is considerable opportunity for long-term capital growth in Marsa Alam. At present the demand for property in Marsa Alam is at a lower level the to the resorts, and undoubtedly there are fewer developments being opened in the region. That said, for early bird investors looking for long-term opportunities in Egypt, Marsa Alam provides many answers for people looking to capital growth.

In summary, when looking to invest in property in Egypt in 2011, there are a number of excellent investment opportunities. From the more developed areas in central Hurghada and Sharm El Sheikh, through to the more long-term opportunities available in more undeveloped areas such as the Sahl Hasheesh, Nabq Bay and Marsa Alam, there is an opportunity for both the calculating investor and the lifestyle purchaser.

What is without doubt, is that the Egyptian property market has few peers when it comes to growth potential over the course of the next ten to twenty years. As such the increases in demand we have seen for property in Egypt over the past two years, looks set to continue for the long-term, and bode well for people looking to purchase in 2011.