Capital Appreciation in Hurghada

[redangel7861]

What type of capital appreciation do people expect in Hurghada in the next 5 to 6 years. I believe the following will have an impact:

1. The introduction of Mortgages - we have already seen certain developers are now offering mortgages to prospective purchasers. In Egypt this is in it's infancy but is about to take off in terms of availability. Countries which have seen the introduction of mortgages have seen significant increase in property values as properties become more attainable. This should be no different for Hurghada.

2. The increase of low cost carriers to Hurghada. This will be inevitable as demand grows for Hurghada.

3. Location of property. Anything on beach front should see significant capital appreciation along with other quality developments. Although in my opinion, smaller, quality five star developments should see greater appreciation than the super resorts, just because the larger resorts will have more choice and less exclusivity than the smaller 5 star quality resort, which in my opinion will be more exclusive. Having too little of a good thing is always better than having too much, hence the exit strategy on the smaller quality beach front resort will be better than a larger super resort, just because of the demand and supply issue.

Again all comments and opinions are welcome

 

[distant dreamer]

Agree with points 1 & 2 and the first part about beachfront property in third point. However, would be surprised if property in Hurghada performed as well as in the "resort communities", such as El Gouna & Sahl. This was taken from Orascams website about property prices in El Gouna:

"In El Gouna, OHD’s model project, real estate value has increased dramatically. Over the last five years property value has increased four-fold. Currently, El Gouna still retains a large land bank for future development"

I believe that places like El Gouna will get more and more popular with holidaymakers as the word spreads about them.

They will attact a different holidaymaker to that of Hurghada, probably more upmarket and maybe people that would prefer an exotic holiday, but with a more "European" feel, where they feel more secure. Also there should always be a resale market in places like El Gouna, as it is exclusive and many wealthy Egyptians want holiday homes in El Gouna and indeed already own there.

 

[redangel7861]

Completion Date

Agree with points 1 & 2 and the first part about beachfront property in third point. However, would be surprised if property in Hurghada performed as well as in the "resort communities", such as El Gouna & Sahl. This was taken from Orascams website about property prices in El Gouna:

"In El Gouna, OHD’s model project, real estate value has increased dramatically. Over the last five years property value has increased four-fold. Currently, El Gouna still retains a large land bank for future development"

I believe that places like El Gouna will get more and more popular with holidaymakers as the word spreads about them.

They will attact a different holidaymaker to that of Hurghada, probably more upmarket and maybe people that would prefer an exotic holiday, but with a more "European" feel, where they feel more secure. Also there should always be a resale market in places like El Gouna, as it is exclusive and many wealthy Egyptians want holiday homes in El Gouna and indeed already own there.

DD,

Whats the completion date for these resorts and how many apartments along with hotels are being built???

My point is that the build time for these resorts are substancial, so in the main there building sites for long periods of time. Even if your development is complete, there are other developments on the resort that are still being constructed so you have a completed apartment sorrounded by a building site.

Once the resort is complete it also takes time for it to establish itself. These resorts also charge premium prices for the apartments, where as in my opinion, the smaller high quality resort in a good location costs less, build time is shorter and your return on capital is higher over a short period of time.

Unless you have a 7-10 year plan on a large resort, then in my opinion money is better spent elsewhere. That's not only my opinion but my experience from investing in Brazil and Morocco, especially in Morocco where they are building a mega resort called Saidia on the northern Medeteranian coast of Morocco. Smaller developments have seen substancial higher capital appreciation than this mega resort which is due for completion 2010.

Regards
RED

 

[Peter Mitry]

Red there are arguments for and against. The bottom line is that Investors who choose resorts like El Gouna or Sahl would probably not invest in downtown Hurghada so the two propositions are entirely different. Likewise there are many who don't have the budget for the bigger resorts who will be very happy with Hurghada....

 

[distant dreamer]

Red,

El Gouna never was meant to be a major development, it started as one man building a villa for his family, then friends wanted to live there, then it has expanded from there. It never had a master plan, unlike Sahl Hasheesh, which has already has all the infrastructure in place after many years of work. Sahl is being released in phases, so yes in the overall resort construction may still be underway, but each phase will be complete, so that the area will be attractive to visitors and have all the necessary amenities required. I believe the entire resort should finish around 2014.

El Gouna continues to develop. However, generally its well away from the main tourist area, and indeed a friend visited there recently and when I asked how the new marina is coming on (which is right next to the beautiful exisiting marina),he said he hadn't noticed anything being built and I can assure you massive work is underway!!! There are of course smaller projects being developed in El Gouna, but generally these are further back and like I say, wouldn't affect visitors. It can be a bit of an eyesaw when you enter El Gouna with the building works going on, but once you reach those beautiful lagoons, marina and beaches, its a different world!

I think that you may be surprised when you visit Hurghada at what a building site parts of it are, and I would guess they will continue to be so for many years as more and more land continues to be developed.

 

[realestatemart]

Red there are arguments for and against. The bottom line is that Investors who choose resorts like El Gouna or Sahl would probably not invest in downtown Hurghada so the two propositions are entirely different. Likewise there are many who don't have the budget for the bigger resorts who will be very happy with Hurghada....

Totaly true 100%

 

[redangel7861]

Investment

Red there are arguments for and against. The bottom line is that Investors who choose resorts like El Gouna or Sahl would probably not invest in downtown Hurghada so the two propositions are entirely different. Likewise there are many who don't have the budget for the bigger resorts who will be very happy with Hurghada....

Peter my point is on the super resorts when you attempt to sell you are normally competeing with many other similar apartments. On the smaller development you have less supply hence the exist strategy is usually better.

I suppose it all depends on the reason for purchasing ie. for life style reasons I suppose the larger resorts are better, for investment and a quicker capital appreciation maybe the smaller high quality resorts are better.

 

[Home Buy Overseas]

i agree with peter/
hurghada with el gouna isn't the best comparison as they both have different offerings not just on price but on many other factors

having seen the two .personally I prefer Hurghada as I feel that el gouna is rather insular , more akin to an all inclusive resort.. i for one prefer the interaction with local people, people trying the old tricks to promote and keep their businesses afloat. Having said that, equally there are people who prefer what el gouna and other resorts similar have to offer. i refer to a recent visit to port el kantaoui in tunisia, compared with sousse, they are worlds apart.

only time will tell on how these places fair investment wise, but i think once a resale market is established, investors at all levels should see good returns for their money. on the other hand, like a couple we met, they are purely buying for there own use and to rent to family and friends. they are going to get much more than financial return and this was measured by the apparant smiles on their faces when they were showing us round.. their apartment looked great and we were a little envious.

 

[Sarah C]

thanks wayne!!!!!!!!!!!!!!

 

[dave99]

How much do you think is a "GOOD" return ?

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How much do you think is a "GOOD" return ?

it has to be more than 6% since you can get this in an ISA in the UK - no risk.

But how do you compare the risk to the return, and time involved in buying and selling.

I think that someone who is looking to use their apartment at least 8 to 10 weeks a year would be looking for something around 10% pa after costs - say over 3 to 5 years, and that is very possible.

Anyone looking for a quick 20% plus return over a short period say 6 months, who never has any wish to use is on a bit more of a stick wicket, without a guarenteed buy back within this time frame, which is possible but not very likely.

Something in between, maybe 25% over 1 year is also possible, but still very risky unless it is in one of the HIGH PROFILE developments, and I think that these are also high risk if the marketing stalls, or the development runs into other problems, UNLESS you beleive you are on the "inside" of the pre-launch deals, and they do exist.

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[Home Buy Overseas]

.
How much do you think is a "GOOD" return ?

it has to be more than 6% since you can get this in an ISA in the UK - no risk.

But how do you compare the risk to the return, and time involved in buying and selling.

I think that someone who is looking to use their apartment at least 8 to 10 weeks a year would be looking for something around 10% pa after costs - say over 3 to 5 years, and that is very possible.

Anyone looking for a quick 20% plus return over a short period say 6 months, who never has any wish to use is on a bit more of a stick wicket, without a guarenteed buy back within this time frame, which is possible but not very likely.

Something in between, maybe 25% over 1 year is also possible, but still very risky unless it is in one of the HIGH PROFILE developments, and I think that these are also high risk if the marketing stalls, or the development runs into other problems, UNLESS you beleive you are on the "inside" of the pre-launch deals, and they do exist.

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hi nigel.. just come back from hurghada and went through and purchased at coral sea pearl.. looks like it will become a well established complex with desert pearl 1 and 2 ajoining it.. i am hopeful for a good return and should be a lot better than an isa ... hope ure development is going well .. and thanks for previous help and advice

 

[wemyss1960]

£3000 cash per annum is the current ISA limit.

 

[Home Buy Overseas]

£3000 cash per annum is the current ISA limit.

do you arrange overseas mortgages..

we need to raise around 35k to purchase a 1 bed in hurghada..

we have a house and will have a cash investment in hurghada as we have already bought a studio there!!