T
totallyproperty
Administrator
Staff member
Egypt property
If you quiz property investors who have ventured into the Egyptian market in years gone by you will likely come across a number of disturbing stories. It is no secret that the lack of regulation across the Egyptian real estate sector has caused controversy with developers often taking money from investors without finishing new projects. Indeed, we have heard of occasions where land has been acquired but not paid for then re-sold with the developer then disappearing. All in all this does not help the reputation of the Egyptian property market amongst overseas investors.
Times are changing
Egypt is an enormous country with a population in excess of 82 million, a variety of different cultures and some extremely attractive investment markets. The economy has been a concern for some time prompting the authorities to take drastic action with a recent devaluation of the Egyptian pound. This will take some time to filter through but should attract a greater level of overseas investment with a particular emphasis on the property market.
Many experts have been waxing lyrical about the need for change in Egypt where the regulatory protection expected by investors and developers is often non-existent. Corruption has historically been a way of life in some investment markets and this has not helped sell the Egyptian real estate market to overseas investors.
Property markets
The 13% devaluation of the Egyptian pound against the US dollar will make Egyptian property more attractive to US and other overseas investors. Indeed, as we have seen in many other countries around the world, real estate investment is very quickly becoming the new hedge against inflation. The Egyptian commercial real estate sector will benefit from growing overseas interest and the residential sector, already very strong in light of the Arab Spring uprising, will also receive a boost.
Initial indications seem to suggest that the Egyptian government is willing to go further with regards to economic reform in the short, medium and longer term. This will be music to the ears of overseas property investors and together with more strict regulations we should see a growing confidence in the country. Unfortunately in the short term the impact of terrorist attacks on the tourist industry is there for all to see. The fact that Egypt depends heavily on tourists should not be underestimated although any action by the authorities would be well received.
Future prospects
When you bear in mind that demand across the Egyptian residential property market regularly outstrips supply by between 5% and 15% per annum there are reasons to be hopeful going forward. This is a very similar situation to the UK property market which has performed admirably although albeit against a more stable economic and political background. A revamp of the Egyptian mortgage market would help to reduce the gap between supply and demand and make for a more liquid marketplace.
The ongoing economic changes, improvements in investment regulations and general flexibility of the Egyptian authorities are all positive factors going forward. However, the wheels of political change grind slowly in Egypt and the authorities will need to be encouraged every step of the way. A more stable economic and political background must surely be a positive for the Egyptian property market going forward?
If you quiz property investors who have ventured into the Egyptian market in years gone by you will likely come across a number of disturbing stories. It is no secret that the lack of regulation across the Egyptian real estate sector has caused controversy with developers often taking money from investors without finishing new projects. Indeed, we have heard of occasions where land has been acquired but not paid for then re-sold with the developer then disappearing. All in all this does not help the reputation of the Egyptian property market amongst overseas investors.
Times are changing
Egypt is an enormous country with a population in excess of 82 million, a variety of different cultures and some extremely attractive investment markets. The economy has been a concern for some time prompting the authorities to take drastic action with a recent devaluation of the Egyptian pound. This will take some time to filter through but should attract a greater level of overseas investment with a particular emphasis on the property market.
Many experts have been waxing lyrical about the need for change in Egypt where the regulatory protection expected by investors and developers is often non-existent. Corruption has historically been a way of life in some investment markets and this has not helped sell the Egyptian real estate market to overseas investors.
Property markets
The 13% devaluation of the Egyptian pound against the US dollar will make Egyptian property more attractive to US and other overseas investors. Indeed, as we have seen in many other countries around the world, real estate investment is very quickly becoming the new hedge against inflation. The Egyptian commercial real estate sector will benefit from growing overseas interest and the residential sector, already very strong in light of the Arab Spring uprising, will also receive a boost.
Initial indications seem to suggest that the Egyptian government is willing to go further with regards to economic reform in the short, medium and longer term. This will be music to the ears of overseas property investors and together with more strict regulations we should see a growing confidence in the country. Unfortunately in the short term the impact of terrorist attacks on the tourist industry is there for all to see. The fact that Egypt depends heavily on tourists should not be underestimated although any action by the authorities would be well received.
Future prospects
When you bear in mind that demand across the Egyptian residential property market regularly outstrips supply by between 5% and 15% per annum there are reasons to be hopeful going forward. This is a very similar situation to the UK property market which has performed admirably although albeit against a more stable economic and political background. A revamp of the Egyptian mortgage market would help to reduce the gap between supply and demand and make for a more liquid marketplace.
The ongoing economic changes, improvements in investment regulations and general flexibility of the Egyptian authorities are all positive factors going forward. However, the wheels of political change grind slowly in Egypt and the authorities will need to be encouraged every step of the way. A more stable economic and political background must surely be a positive for the Egyptian property market going forward?
