Investment Growth In Egypt

Egypt Investment Growth

Egypt has long been a popular travel destination. Today, due to encouraging economic trends, property in Egypt is becoming more popular as a location amongst worldwide purchasers and recent years have seen a growth rate of an encouraging 20-30% per annum in some key locations.

Investment property in Egypt, as in many emerging markets, relies heavily on the success of Egypt’s ever increasing tourism industry. Beautiful, well established tourist hotspots are already in existence, particularly along the Red and Mediterranean Sea coasts and cater for a wide variety of modern tourist requirements, from excellent diving and snorkeling, five star hotels and golf courses to cultural and historical activities. New off-plan opportunities from heavy weight international developers are now springing up, attracting overseas investors looking for a secure investment with good growth potential at rock bottom prices. Due to increased tourist numbers, these buyers are also safe in the knowledge there will be a strong market for their investment. Furthermore, the imminent opening of the newly modernized Cairo international airport in early 2007 is set to bring a new influx of visitors to complement Egypt’s new look 21st century tourist industry.

Egypt’s Prime Minister, Ahmed Nazif is concentrating on the country’s potential as a promising investment hub, especially in major infrastructure sectors, which will inevitably have a direct result on the attraction of Egypt property to foreign investors. During the Middle East Travel and Tourism Summit of 2006 in Jordan, Munir Nassor told more than 400 leaders of from the international tourism industry that Egypt and the Middle East as a whole, can expect to attract new investment in the hotel, spa and airport sectors. He added, “The cooperation we’ve had so far between private and public sectors is giving the right kind of push forward”.

Due to recent reforms to streamline purchasing proceduresfor property in Egypt, the country now attracts more overseas property purchasers than ever before. This can also be put down to its relatively simple purchase system with lower taxes than in many other countries and no capital gains or inheritance tax.

Capital Growth Predictions

Based on a steady increase in investments in the tourist sector and a resulting surge in visitor numbers, Egypt property offers promising growth potential to all types of investors, while some areas of the Red and Mediterranean Sea coasts as well as certain areas of Cairo and Alexandria, are currently attracting as much as 25% annual capital growth. Investment in Egyptian property is offering great opportunities for purchasers while it waits during the infancy of an exciting emerging market.

Rental Yield Predictions

Rental income from property in Egypt is of great interest to investors as high rental yields are already achievable from property located in the current tourist hotspots. It is expected that mortgage payments and bills can be covered for the year from the rental income achieved. A fantastic year-round climate attracts a reliable tourist trade throughout the year.

Egypt Economy

Egypt’s economy is undergoing steady growth and in the last quarter of 2005, the annual growth rate in Egypt has risen for the first time to 6.1% and inflation dropped dramatically from a huge 18.1% in 2004 to only 3.1% in 2006.

Due to a number of economic reforms, private business has increased to represent some 80% of the economy today. Experts agree that the current economic climate should improve the economy of the country, create more opportunity for employment and domestic wealth growth, and increase the attraction of the country from an overseas investor’s point of view. With direct foreign investment continuously on the up, Egypt’s economy shows enormous potential over the long term.

Reasons Why Egypt is an Intelligent Property Investment Location

Low property prices starting at around £30k
Year-on-year capital appreciation of between 20-30%.
Beautiful, well established tourist hotspots suitable for varied tourist interests, from excellent diving and snorkeling to cultural and historical locations
Stunning natural and unspoilt landscape
Steady annual growth in tourist figures
Less property taxes than paid in the UK.
No capital gains tax
British residents avoid inheritance tax on any Egyptian properties
Warm desert climate with temperatures ranging from 14°C in winter to 30°C in summer
Year-round tourist season
Politically stable country
Strong economic growth and inward investment creating a rich investment climate.
Well renowned developers creating luxury resorts to cater for Egypt’s new influx of international tourists
Easy air access from many European destinations makes Egypt an ever popular medium haul holiday location
Cairo International airport is being modernized and a new terminal is to be built by early 2007
Relatively low cost of living and maintenance costs
English is widely spoken, after Arabic