Economic Factors In Egypt

Egypt has a number of economic reasons for investors to consider when assessing its property market potential. Below are some key factors you will want to be aware of while doing your research.

Capital growth

Investment property in Egypt is a new emerging market, which puts potential growth figures at their highest at present for timely investors. The prices of property in Egypt remains incredibly low while an ever increasing tourist economy is a clear indicator that property prices in many areas will continue to rise at an unprecedented rate. In 2006 alone, annual growth rates of 20-30% were typical in the prime property locations such as the Red Sea and around the residential satellites of Cairo.

Egypt has experienced very strong economic growth in recent years, a situation that continues even today, with 2005 growth in GDP of 4.5%, divided on a population growth of 1.8%.

Booming Market For Foreign Investment

The property market in Egypt currently sits on the brink of a boom period and now is a perfect time to purchase property in Egypt.

While infrastructures are readily in place and prices are low, many investors are seeing an opportunity in the making. The imminent introduction of mortgage facilities to foreigners in Egypt will precipitate an increase in demand for property and prices will inevitably rise at an even greater rate than investors are already enjoying today. Property investment is expected to increase not only on the seaside tourist resorts, but also in cities such as Cairo, where a huge shortage of accommodation continues to be a problem waiting to be addressed.

In 2005 Egypt issued a decree (number 548) assisting non-Egyptians to invest in the tourist sector by abolishing a number of red tape procedures and streamlining investment procedures, An uncomplicated tax system with no inheritance or capital gains tax for foreigners are added incentives to Egyptian property purchase.

Low Cost of Living

The cost of living in Egypt is far lower than in most European countries. As a result, the cost of maintaining and managing your property is very low and it is small wonder that Egypt is also increasingly popular amongst foreign property purchasers.

Economic Expansion

The government of Egypt is committed to transforming the country’s economy through the promotion of foreign direct investment over the long term. As a consequence, it has recently introduced new reforms to customs, income and corporate taxations, while privatizing certain sector industries, and developing an export market for their natural gas deposits. Experts agree that all these efforts should improve the economy of the country, create more opportunity for employment and domestic wealth growth while increasing the attraction of Egypt for overseas investors.

Growth in the tourist industry netted 2.5 million tourists in 2005, representing 6% of GNP. This figure is set to rise with growing introduction of luxury purpose built resorts throughout the country – all good news for today’s property investors in Egypt.

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