over supply in touristic areas V coastal growth
Having grown up in Jersey, and lived in Mallorca and Bournemouth I have witnessed at first hand the rapid rise in coastal resorts transforming themselves into more diverse economies. In fact my interest in this subject led me to Alicante University to study for a degree in Maritime Science, where I learnt much about the human impact on coastal areas.
There will always be a time when a market becomes saturated, unless the local, regional and national governments put a curb on developments. A saturated market does not necessarily mean that property values will fall, but more that the region has reached its natural limit. What investors need is that the region and those in charge to then limit over development.
Unfortunately in the past in certain areas of countries like Spain, for example, this failed to happen. There was too much temptation for interested parties to close their eyes, and take the envelope.
The fact about Egypt, or to be more concise, the red sea region, is that beyond the beach there is nothing but desert, so obviously, the growth will be limited to the coastal area. So Egypt has a rather large natural barrier to over development...the baking hot desert.
In touristic areas, the front line areas, will always hold the most appeal. The human appetite for a place by the sea is pretty universal. Although there are large amounts of beach front areas that could be developed, it is our instinct to cluster..we all need shops, bars, airports, hospitals, and other people to help us enjoy life.
This need for others, the nature of the Egyptian landscape, and the massive amount of space available should help restrict growth to acceptable levels.
In Hurghada, for example, there is a lot of development going on. However if you go to the property for sale section, you will notice that the amount of developments for tourism is relatively limited. I have never counted but I could guess us agents have well under 50 developments to choose from. There is obviously much more than 50 developments going on here in Hurghada! So who are they for? Egyptians! Hurghada is a boom town, being fuelled by foreign investment, but also by growth in Egpyt due to economic and political reforms.
Rising raw material costs, combined with rapid growth in GDP (7% last year) in Egypt are forcing the prices upwards. I believe the secondry market in Egypt, will be in selling back to the Egyptians. The front line will attract the wealthy and the middle class, looking for escape from Cairo, and the cheaper units further back will be for the new working class who are flooding into the area.
This escape from Cairo will not be limited to Egyptian tourism, but more likely will be a flight from pollution, and overcrowding to an area of new business opportunities in a more liberal environment. Also one should not overlook the lack of places to live in Egypt, beyond Cairo, Luxor, Sharm and Alexandria. This makes Hurghada, and the other new towns, very attractive places to live to the average Egyptian. Take a walk down Village Road, Hurghada on a thursday night too see what I mean.
A final important factor in the growth of touristic resorts in Egypt, is the need for business ventures to have Egyptian staff, thus including the local population into the redistribution of wealth.
My point here is that we agents, investors, speculators, and tourists are certainly the catalyst for growth, but Egpyt and the Red Sea has probably reached, or will reach a point where it can survive without us.
regards
),why do we assume that buyers in the region are predominantly British/Irish. What about the Gulf, Russia and the rest of Europe. I think we came into the picture later than a lot of these other places.
