Egypt Optimism still High among Investors

[Peter Mitry]

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Words: Ashley Rigg

Published: 24th February 2011

*Industry reports New Year sales surge
*Industry reports New Year sales surge
Whisper it quietly but there is a strange and unfamiliar smell in the air. Optimism…..an almost forgotten emotion for those of us plying our trade in the overseas property industry.

Not only are portals reporting record traffic, some of the leads are actually converting into sales. That’s real money to you and me!

For the last few weeks, during the course of normal business, we have been coming across agents who have begun selling property again.

Michael Patterson , director of USA Property Direct says he is more optimistic than at any time since the downturn:

“We’ve had unprecedented levels of interest and sales this year. We’re selling 20 to 25 units a month which is up from around 5 to 7 last year”.

It is a similar story in some parts of Spain.

“Last year we sold two houses all year, in 2011 we have sold two already”, says Tina Quilter, director of Spanish Management, an agency selling on the Costa del Sol. “There seems to be a feeling of ‘let’s do something now’, people are fed up with the bad news and seem to want to get on with it,” she says.

Even in Egypt, a number of agents are reporting strong sales despite the recent political turmoil.
Peter Mitry, director of Egypt Real says he has had a record-breaking February:

“We have sold at least an apartment a day since the crisis began. We sell property for £11,000 to £12,000 over the phone so it is a low risk decision for people to make. Higher-priced property sales where people have to travel to purchase have been affected but our low-price telephone strategy has generated a 400% increase in revenues compared to last year”.

Are these isolated incidents or is it part of wider industry trend? The traffic figures from one international property portal suggests it maybe the latter.

“Traffic figures across the network of portals managed by Lead Galaxy hit over 500,000 users in January” reports director, Dan Johnson. “Traffic to the TheMoveChannel.com [the highest traffic site in the network] is at the highest level since 2007,” says Johnson.

The reasons behind the change in buyer sentiment are difficult to gauge but price is undoubtably a key driver.

The majority of investors still see property as a relatively safe long-term investment and a good hedge against inflation. With confidence in the domestic property markets like the UK waning, it maybe that people are finally feeling confident enough to commit to low-entry ticket, high yielding investments abroad.

Let's hope it continues.

Source: Global edge

 

[danny]

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*Industry reports New Year sales surge

...............................Even in Egypt, a number of agents are reporting strong sales despite the recent political turmoil.
Peter Mitry, director of Egypt Real says he has had a record-breaking February:

“We have sold at least an apartment a day since the crisis began. We sell property for £11,000 to £12,000 over the phone so it is a low risk decision for people to make. Higher-priced property sales where people have to travel to purchase have been affected but our low-price telephone strategy has generated a 400% increase in revenues compared to last year”.

The reasons behind the change in buyer sentiment are difficult to gauge but price is undoubtably a key driver.

In the light of recent unrest in Egypt I believe the local property market will have to realign its pricing strategy to attract buyers back. Unfortunately I don't share the same optimism and have had to re-evaluate the current worth of my property.

Even before the uprising sales looked to be slow due to the bad press that some developers and agents had brought upon the area through overpriced, unfinished properties and total lack of customer service.

Hopefully, with the scarcity of investors, the market will finally learn to respect the people who give them a living.

 

[ARKANSA]

Danny,

Couldnt have put it better myself.Seems to me you have two stark choices other than not investing the first place. You either end up with no property. Or by the time its finished the zimmer frame you eventually have to use due to old age wont get you thu the front door. Or the management company who oversees the maintenance of the properies forgets their obligations in mainaining it but still demands money. We could go on about fantastically overinflated added costs for whatever is in vogue at the present time.

Chad

 

[wellesley]

Hi,
Glad to hear things are picking up in Egyptian property market but it still worries me that prospective buyers have no protection , would it not be the time for agents and developers to become regulated, the developer if he has not enough of his own money to build should not be selling or expecting agents to get the punters to part with their cash to start building.
Still the same old Egyptian contracts i suppose and still the same outcome in the end unless people start rectifying the old problems.

 

[Peter Mitry]

Industry Regulation?

Hi,
Glad to hear things are picking up in Egyptian property market but it still worries me that prospective buyers have no protection , would it not be the time for agents and developers to become regulated, the developer if he has not enough of his own money to build should not be selling or expecting agents to get the punters to part with their cash to start building.
Still the same old Egyptian contracts i suppose and still the same outcome in the end unless people start rectifying the old problems.

The major problem here is that there are no bank guarantees; individuals or Developers can buy a plot of land, often with bank finance and immediately begin selling 'off plan'. If sales slow down and the Developer runs out of cash then so does the construction and it can be years before you get your property. Many people on this forum and elsewhere have been caught like this.

As agents we try to check the finances of the Developers we deal with; we certainly check land ownership documents, planning consent and other required documents, but it is very hard to assess the financial position of a company unless we have a history of dealing with them over time. Fortunately many Egyptian constructors are honest about their finances and will openly admit they need client funds to build. In these cases we have to decide whether our network of agents, combined with the Developer's own contacts, can generate enough sales to get a project completed.

Other Developers already have a bad track record so we know to leave well alone.

But Wellesley is right; it is not an exact science and in the absence of effective government or industry regulation we do the best that we can.

Once we return to some form of effective government we should all work towards regulating the industry and bringing in safeguards to protect client's money and ensure that they get what was promised. It will take time but, as in other countries it will happen.