Analysis of the dynamics of the real estate market in the Egyptian Red Sea coast has shown that over the past 5 years the annual increase in property prices ranged from 15 to 40%.
The main factors shaping the growth in property prices in Egypt:
The main determining factor - the ever-increasing demand among foreigners as demonstrated by the increasing like a snowball, sales of villas, apartments, and commercial real estate to the British, Germans and Russians.
Contributing factors:
- Rising energy prices and, consequently, the metal and other building materials;
- The impact of the devaluation of the dollar on the Egyptian pound;
- Increase in prices of imported machinery and materials
Constraints:
The main factors constraining the growth in property prices in Egypt are:
- Highly competitive real estate market in countries such as Turkey, Bulgaria, Montenegro, Cyprus and Greece;
- The relative remoteness of Egypt from Europe and Russia;
- Lack of awareness of the possibility of buying property in Egypt among the people, have never visited this unique country and as a consequence, the fear of the mysterious East;
The huge popularity of real estate in Egypt among the different countries of the following reasons:
- Consistently implements the state policy of Egypt, aimed at creating favorable conditions for foreign investment in the economy, including private investors;
- Political stability and security of a terrorist in Egypt;
- Relatively low property prices and labor;
- The traditional friendliness of the local population towards foreigners;
- Excellent year-round natural conditions, especially in the Red Sea coast;
- The rich heritage of the great ancient Egypt, the modern descendants of the carefully preserved Tutankhamun, Hatshepsut, and Cheops. This is not only a great place to relax, but also a great opportunity to get acquainted with the rich history of Egypt, which stood at the origins of modern civilization.
The main groups of foreigners to purchase real estate activity and rest in Egypt in 2007:
- The subjects of her Majesty the Queen of Great Britain;
- German citizens;
- The Russians;
- Citizens of the Baltic countries;
- The citizens of Eastern Europe;
- U.S. citizens
The reasons for the immense popularity among the Egyptian real estate market include support for the British at the state level, retirees or people nearing retirement age, decided to purchase a property for permanent residence abroad in retirement. This support is reflected in the substantial subsidies and compensations.
Egypt is becoming increasingly attractive to foreign investors. Thus, according to the analytical group «Doing Business» World Bank in 2008, Egypt was in first place in the list of reformers in a part of creating an enabling environment for business. This country has significantly improved its position in the global rankings on the ease of doing business, with reforms in five of the 10 areas studied in the report "Doing Business".
"One of the conclusions of the report is that the highest return on equity stated in the countries undergoing the most far-reaching reforms", - said Michael Klein, Vice President of the World Bank and IFC on the development of financial and private sectors. - "Investors are looking for more opportunities and find them in countries that implement reforms, regardless of the initial positions," - added Mr. Klein. Carried out at a rapid pace of reform in the major emerging economies: China, Egypt, India, Indonesia, Turkey and Vietnam - all of these countries have made progress in creating an enabling business environment.
Thus, it is clear that the trend growth in popularity of Egypt, the country's property among foreign buyers and investors to continue. In accordance with the laws of the market price is primarily due to demand. Consequently, real estate prices in Egypt will increase.
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