credit crunch

[sdgc]

Does anyone think that the credit crunch in the uk has had, or will have any effect on the egyption market (slowing down sales, reducing prices etc ) ?

 

[SuziQ2708]

Does anyone think that the credit crunch in the uk has had, or will have any effect on the egyption market (slowing down sales, reducing prices etc ) ?

I'm sure it will have an effect on ALL purchasing worldwide as it becomes increasingly difficult and more expensive to borrow funds. Those, like myself, lucky enough to have funds available to purchase property in cash, may still opt for investing in property abroad. Our funds have sat in high interest bonds in the UK for the past few years and have barely grown. We chose to invest in property in the hope that our funds will grow and give us a tidy pension fund in a few years

I'm sure the 'credit crunch' will have an affect in property purchase. Everyone is experiencing less disposable income, myself included, additional expenses are just not an option until this looming recession has passed and we can spend again.

 

[Sanchez]

Great question ..... I've been thinking about that for a while too.

It's a "double edged" sword ........
Many people in the UK will have less money .... but maybe alot of those people weren't potential investors in Egypt anyway.
Investors with money who may have previously invested in the UK, may be looking for better options abroad.

The nice thing about the property market in Egypt is that it has investors from all over the world. Although a significant percentage are British.

My personal opinion is yes it will, but only marginally.......

 

[Lsab]

I tend to agree with you Sanchez.

The credit crunch isn't worldwide, in fact as I understand it, relatively few countries are effected e.g. the UK and the US. The Egyptian market is not dependant on us Brits, so we might see some developments slowing down but not all. I'm sure the money men amongst us will have a more informed view which I hope they will share with us!

 

[SuziQ2708]

I tend to agree with you Sanchez.

The credit crunch isn't worldwide, in fact as I understand it, relatively few countries are effected e.g. the UK and the US. The Egyptian market is not dependant on us Brits, so we might see some developments slowing down but not all. I'm sure the money men amongst us will have a more informed view which I hope they will share with us!

Sorry, when I stated Worldwide I actually didn't mean the Credit Crunch is Worldwide but purchasers from the UK in particularly will slow down, having a knock on effect with UK purchasing Worldwide not just in Egypt if you see what I mean.

 

[rossantony]

my quote on stalling UK economy...

I removed the projects name so that the focus in on the economics.....

Ross Donaldson is the Regional Manager for Experience International in Egypt, and has taken a special interest in the xxxxx project, believing it to be the first of many new luxury 5 star developments being planned on Sahl Hasheesh – he explains about the property market in Egypt in general and why this development is so special. “It is an exciting time in Egypt right now; the country is going through an unusual period of economic growth, with Egyptian GDP hitting 7% last year. This is, of course a huge benefit for investors, and here in Hurghada, investors benefit from the ability to purchase freehold property, whereas on the Sinai Peninsula, and Sharm el Sheikh in particular, you can only buy on a 99 year lease. Until now, Hurghada has been a secret for savvy investors, and has only been promoted by specialist firms, and even though the UK economy is stalling, interest in Egypt is higher than ever. With 25% capital growth per annum it couldn't stay a secret for ever, and now many clients are countering their UK losses by investing their savings into the high returns that Hurghada is offering. The best thing about Egypt for buyers is that it is such good value. Everything is affordable; here you can enjoy the good life at a fraction of European costs. That is why Egyptians are building high end luxury resorts like xxxxxx. It’s a gated community, with 24 hour security, safe and hassle free. It has a luxury spa on site, so you won't have to move far if you want to be pampered. When you visit Egypt, and Sahl Hasheesh, in particular you feel as if you are living in a refined country, with history on your doorstep. This is certainly a development, and a location, that will be successful."

 

[Lsab]

Sorry, when I stated Worldwide I actually didn't mean the Credit Crunch is Worldwide but purchasers from the UK in particularly will slow down, having a knock on effect with UK purchasing Worldwide not just in Egypt if you see what I mean.

Apologies Suzanne - I wasn't negating what you said

 

[SuziQ2708]

Apologies Suzanne - I wasn't negating what you said

No problem Linda, just didn't explain myself very well

 

[Sanchez]

The credit crunch has hit the US and UK the hardest so far, but some othere countries in Europe are also feeling it.

I still think that the majority of investors in Egypt are people with a decent amount of disposable income, looking for an alternative investment / second home in the sun.

Interestingly I was recently in El Gouna and was looking at some properties. The agent did say that there were a few less Brits looking for properties, but more Egyptians / Russians.
This is a big advantage that Egypt has over some other property investment areas.

I've just brought a property off plan which is due to complete in 3 years. Not a bad option with the present economic climate.......

 

[Organics1]

Hi All,

I keep reading articles like the one quoted above about how Egypt (Red Sea) property market is seeing capital growth from anywhere from 15% - 30% per annum. Other than EL Gouna where there is a track record of prices increasing and property being sold (but please bare in mind this is a town with over 3000 permanent residents) how many other people have bought a property of plan or not and actually made these staggering profits. The one main reason for the hike in prices is the cost of materials, just ask any constructor!

Interested to hear comments

 

[Organics1]

purchased for £42k 12 months ago

now will be minimum £64k

Hi,

No disrespect but this is exactly what I'm talking about.

I understand that based on other prices currently being asked by developers that's what your property should be worth but what I'm interested to find out is how many people have actually "sold" for these kind of mark ups off plan.

I have experience in buying and selling properties in Dubai off plan and really from the off there was huge amount of re-selling of contracts with premiums. In some cases 100% in 12 months, although it's slowed down a lot now.

I just haven't seen the same re-selling of contracts happening on the red sea and if they are where are people selling them. Which agents or web-sites? I'm always checking agents sites to see for re-sales but other than one that came on in Hurghada Dreams (I think) I haven't seen another one, not yet anyway. Perhaps everyone buying is in it for the long term.

 

[distant dreamer]

Hi,

No disrespect but this is exactly what I'm talking about.

I understand that based on other prices currently being asked by developers that's what your property should be worth but what I'm interested to find out is how many people have actually "sold" for these kind of mark ups off plan.

I have experience in buying and selling properties in Dubai off plan and really from the off there was huge amount of re-selling of contracts with premiums. In some cases 100% in 12 months, although it's slowed down a lot now.

I just haven't seen the same re-selling of contracts happening on the red sea and if they are where are people selling them. Which agents or web-sites? I'm always checking agents sites to see for re-sales but other than one that came on in Hurghada Dreams (I think) I haven't seen another one, not yet anyway. Perhaps everyone buying is in it for the long term.

Hi

I personally know a couple of people who have sold apartments at Sahl Hasheesh who have done very well indeed from their investment. These were early investors in the project, thus those taking the most risk. Have a look at the following link and you can see prices of resales on Palm Beach Piazza and El Andalous - Estate Alliance ~ List property
If they sell for this sort of price the owners will have made an excellent profit - mainly due to purchasing very early. With prices of many of the other non-beach front off plan properties at around £1000 per square meter, these beach-front resales actually still represent good value for money as the apartments, particularly in El Andalous, are quite a good size.

 

[Organics1]

If they sell for this sort of price the owners will have made an excellent profit

Couldn't agree more but for me the emphasis and a big one at that is on the IF.

These were the first two developments to be released in Sahl but now look at it!

 

[distant dreamer]

Well here's someone thats done just that!!

Originally Posted by Peter Mitry
My first investment in Sahl Hasheesh was a one bed in Palm Beach bought for 29,000 GBP and sold after 17 months for 59,000 GBP. Thats 103% in 17 months. I just believe that in the big resorts where so much of what is happening is adding value, added to the fact that you are absolutely front line when all around you is sold out can and will continue to reap these high returns.

__________________

 

[Organics1]

Well here's someone thats done just that!!

Originally Posted by Peter Mitry
My first investment in Sahl Hasheesh was a one bed in Palm Beach bought for 29,000 GBP and sold after 17 months for 59,000 GBP. Thats 103% in 17 months. I just believe that in the big resorts where so much of what is happening is adding value, added to the fact that you are absolutely front line when all around you is sold out can and will continue to reap these high returns.

__________________

Dear Distant Dreamer,

I have to take my hat off to those who bought in early in Sahl and EL Gouna and as you quite rightly said took the biggest risk and so deserve the biggest reward. However I'd be interested to know if those same early bird investors would buy at today's prices considering the current economical climate.

Just a thought

 

[distant dreamer]

Dear Distant Dreamer,

I have to take my hat off to those who bought in early in Sahl and EL Gouna and as you quite rightly said took the biggest risk and so deserve the biggest reward. However I'd be interested to know if those same early bird investors would buy at today's prices considering the current economical climate.

Just a thought

Hi,

I think the answer is probably yes. Take us for example, almost three years ago we purchased a resale in El Gouna - a small one bedroom apartment, but in an excellent position with a good view. We paid more than double for that than what we have paid for a two bedroom apartment in El Andalous a year later!
When I think how much we paid for the El Gouna apartment, I do consider we paid top money, but we purchased it because we loved El Gouna and wanted to be part of it. It was not purchased with a view to making lots of money, but more as something we wanted for us. The Sahl Hasheesh property was originally purchased only as an investment. However, seeing how the resort is coming along and that beautiful bay, I really don't want to sell that now as I'm starting to fall in love with Sahl Hasheesh also!!!

Given the current economic climate I think quite a lot of people will be wondering where to invest their cash and Egypt still seems to be heading in the right direction, so I think there's certainly some gains for people that invest in the right areas.

 

[dave99]

Is there a point at which cost will be a barrier

Does anyone think that the credit crunch in the uk has had, or will have any effect on the egyption market (slowing down sales, reducing prices etc ) ?

.

Is there a point at which cost will be a barrier.

Up to certain price level people can buy without borrowing:
- maybe upto £50,000

Above this level then the ability to borrow maybe becomes more of an issue, and hence the credit problem is more relevant.

Anyone have any views on where this price level might be.
.
.

 

[rossantony]

ceiling

uk buyers > 40k
russian and eastern buyers > 60k