When to buy in Hurghada, Egypt property market?

bestie11

Putting aside the controversy currently raging elsewhere on this forum over a certain project in Hurghada, I think it would be worthwhile to open up a debate over the Red Sea property market as a whole in Egypt as I think it would be unfair if "one bad apple" spoils the general perception of the area.

To me, the reasons for buying property there are clear. The most beautiful sea in the world, low cost of living, fantastic culture and, of course the key reason to buy - the cheapest property available to Brits wanting year-round, warm sunshine within a 5 hour flight in a (relatively) stable and safe country.

However, with the the global recession now increasingly casting its gloomy shadow over this market, I have been wondering about WHEN would be the best time to buy here from an investment perspective. With the building site that is Hurghada increasingly delivering properties onto the market, I am struggling to see how demand could possibly keep up with supply over the next couple of years - even for those with prime locations and facilities.

Developers had obviously based their decisions to build on the expectation that there would continue to be an almost an insatiable desire from Europe and Russia to buy property in Hurghada - before the effects of the credit crunch.

With Europe and Russia, the key markets for Hurghada, now going into their biggest synchronised recessions (in the case of Russia, a sharp slowdown if not technical recession, allied with a growing currency crisis) in living memory, I fail to see from where the extra demand for Hurghada property will arise.

Yes, there will no doubt be still plenty of retirees from Europe and Russia coming to live here and the usual "funny money" brigade, smuggling in their cases of cash. But I just cannot foresee how these people will outweigh plunging demand from investors who:

1) Are now now more cash-strapped than ever as the credit cruch increasingly bites and forces them to sell their flats, off-plan or otherwise, in Egypt to cover problems at home.

2) Take flight as the virtuous speculative bubble we have seen in Hurghada suddenly stops and probably goes into reverse and quickly turns into a vicious cycle. Just look at the oil price as an example of how fast speculators can reverse a virtuous circle into a vicious one (from the Middle East and Russia's point of view at least!) when the fundamentals of a market weaken.

So the question remains - when to buy. Would it not be best to wait a year or so at least when these investors will probably be offering their resale flats at cheaper prices than the naturally more myopic developers currently are, while in addition not incurring the significant off-plan risk of some developers going bust in the present climate? Of course from a British perspective, you have to consider whether Hurghada property prices will fall proportionately more than GBP/EGP over the next year or so. I'm guesstimating they will!

OK, that's just my two penneth worth on the subject. I'm sure there are many more knowledgable Hurghada-savvy people out there than me who can no doubt put me right on when to buy!

hearts

YUK ;-) Not for me.

_bankrupted

Top marks for the best spam post in a while!!

I'll answer the question... The best time will be NEVER.

Why would anyone (unless prepared to write off the whole sum involved) ever buy a property outside of the EU.

I have a Spanish wife, we own property in Spain. That is troublesome enough. It's a developed EU country and I have Spanish family to help out.

The potential problems of a non-EU country such as Egypt are huge.. I shall list them to balance the spam above.

Potential to lose all your money
Huge problems with a foreign culture and language you will not understand
Exploited in every aspect of the property ownership because you are a foreigner
Have no automatic right to live in the country,
Have no automatic right to work in the country
A greater target for crime
In a country with strong anti-west feeling.
Westerners have been the target for Mulsim extremists

Now for the logistic problems

Expensive to travel there.
have to travel by aircraft
Subject to air-routes, airline policy

You would have to mad to buy in Egypt when mainland Europe can offer the same with much more security.

Folks don't do it....

bestie11

Hi Bankrupted. If I'm a spammer, I should get the lowest possible marks as the worst spammer of all time as my message is : do NOT buy in Hurghada at the moment! It's a bit like the decision of whether Britain should scrap the pound and join the euro - nice idea in principle but maybe never if the conditions are not right! That's what I'm saying at the moment about Hurghada. I don't think the economic climate is right at the moment from an investment perspective.

I have to admit that I too, like you, at first had those preconceptions about Egypt before I went there, i.e concerns about safety, terrorism etc. But I have to say I don't think I have NEVER felt safer in any country in my life! I have walked through the most impoverished and "roughest" areas of Hurghada, where people have almost nothing, and yet have never felt threatened by gangs or feral youth that we so often see on the streets in the UK. The most I'll get from some of the kids on the street it a friendly "Hello my freeend, where you from?" as they quickly try to empty my wallet...by SELLING something to me - not by stealing or mugging as you often would get in the poorest areas of any major European city.

As a Brit, you are often treated like royalty by so many locals in Hurghada, who admittedly will try and put one over you if you're a bit wet behind the ears, but will almost always welcome you with warmth. They may try and rip you off over a few quid if you're gullible enough not to haggle, but they do not steal. If they did steal from a tourist and caught by the police, their feet would never touch the ground - not something you could say about the police in the UK or Spain for that matter.

I have also never been met with any hostility because I am British. Contrast this with many of the resorts in the Mediterranean who, after years of being beseiged with British yobs and lager louts, now despise the British but out of economic necessity still take their money. Thankfully in Egypt, because it is a Muslim country, alcohol is available (£1 GBP a pint in bars and restaurants!) but drunkeness is not tolerated. Hence the football shirt-wearing, beer bellied, lager lout brigade will (hopefully) not be attracted to go there.

Yes, there have been some alleged problems with property in a certain development in Hurghada (whose developer is, wait for it....English!), but surely there have been many more high profile cases of property fraud in Spain, with people losing their life's savings on ill-fated investments. Who can forget the recent images of that poor elderly British couple who, having put their life savings into building a beautiful villa, then had it knocked down by the council's bulldozers - while they were still trying to salvage their belongings?

This was yet another example of how the corrupt Spanish lawyers were leading Brits to be exploited by the Spanish system. And where was the so-called "safety net" of being inside the EU to protect them? Remember, effectively it's only the UK that panders to EU law these days and thinking you're protected by EU legislation in continetnal Europe is a mirage it seems to me. So I would feel just as unprotected by the Spanish system as I would by the Egyptian system if something went wrong.

Let's not forget either that the cost of living in Spain is many times higher than Egypt, the weather is infinitely better in Egypt - year round, sunshine and low humidity and a cooling northerly breeze in the summer makes it feel a lot more pleasant than Spain, even if the actual temperature may be higher. Two hundred quid for a return flight to Hurghada, where I am guaranteed warm sunshine in January, or a £60 cheap flight to the south of Spain in winter when it may rain more than in the UK? An apartment in which place would you prefer?

Having said all that, I still think an investor shouldn't buy in Hurghada until the global recession shows signs of abating!

Breaking news from Hurghda....Bestie11 has just been fired by Egypt's Ministry of SPAM Department. I thought Muslims didn't like pork...

paulfaz

Why would anybody buy in Egypt? It's a bloody s***hole. Yes the brochure tourist areas look nice and generate huge income - unfortunataly the local people and economy see very little of it. Viva la revolution! - It will surely come!

bestie11

Hi Paulfaz. I also had the same idea about Egypt as you - before I actually went there to see for myself. Have you ever been to El Gouna or Sahl Hasheeh, both just 30 mins away from Hurghada? No clever glossy holiday brochure could ever do the beauty of the beaches and crystal clear coral seas justice. Have you ever dived or snorkled in the Red Sea and seen the most spectacularly beautiful corals and sealife?

As Europe goes through a very chilly spell, where else can I go within 5 hours of Britain and enjoy a nice meal outside in balmy 20C conditions on a late November night ? The Canary Islands maybe? Well, the Atlantic sea just can't compete with the Red Sea. I've been to many Spanish/Canary resorts but I've never been on a beach there and thought, "Wow, this is like something off a Bounty advert", but I have in Hurghada!

Have you ever tried the food in Egypt? You can have a banquet of fresh seafood, lobster etc, all washed down with a nice cold £1 a pint beer for a fraction of the price of some bland paella they often serve up for the non-discerning Brits in the Spanish resorts.

It is often cloudy and sometimes rains for a few days in the Canaries in winter - no good for me if I'm a sun-starved pasty Brit in need of guaranteed cloudless skies in November! Also don't forget it your pounds won't go very far anywhere in Europe these days!

paulfaz

Been twice to Egypt- Cairo and Luxor. Fascinating. It just doesn't sit well with me going to the tourist traps you describe, but I am sure they are very nice.

Is one of these your development? http://www.info-world.com/egypt/

bestie11

Thanks for the link, paulfaz. Hmmm...food for thought indeed. Thankfully, none of the buildings in the photos are ones I have considered in Hurghada :eek: But definitely underlines how careful you've got to be!

Trollfever

Why is Egypt the only country that gets promoted on this Board?

Alistair Darling 24th November 2008

So instead I have decided to reform APD into a four-band system ensuring those that travel further and have a larger environmental impact meet that cost.
I believe this will be effective in reducing emissions from aviation.

ahmedluxor

i hace been lliving in hurghada for the past two years and would not swap it for anywhere else in the world. the climate, the people, the culture, the very cheap cost of living and, of course, the magnificent red sea. i bought land here 3 years ago and built an apartment block of 14 flats of which i have sold 4 to friends and rent the others out to give me an income so that i don;t have to return to old england unless i wish to. admittedly there are some developers here of whom you have to be very wary but we have had these thoughout europe and throughout the ages. my advice would be come and try it

Altarf

http://www.cambridge-news.co.uk/cn_news_home/DisplayArticle.asp?ID=409894