Overseas Property World

I began paying closer attention to Egypt property last December, when it had almost become sacrilegious to mention overseas property investment. I had been out of the overseas property game for a couple of months — giving direct sales a whirl — and had been asked by a friend-of-an-industry-friend to do some writing work, and Egypt was one of the countries content was needed for.

So, I began doing some research into Egypt. Immediately the similarities with Morocco became apparent, but even Morocco could not compete with the low prices of luxury and high end off plan property in Egypt.

Property prices in Cairo are low, but Hurghada is the hot-spot for me. I had come across Hurghada in my direct sales role, as a rapidly rising tourism destination. Then, I’m looking at high-end 2 bedroom apartments near the beach for less than £20,000 — fool proof?

Yes, it does sound too good to be true, but as with any off plan property investment, emerging market or established, by doing the proper research the risk can be minimised.

That aside we can focus on the potential profit: Africa is often overlooked when we talk about emerging markets, and property markets, but now, as last year’s hottest emerging markets like Brazil and Russia are faltering, Africa’s emerging economies are flourishing, with Tunisia, Morocco, and Egypt all forecast to grow by over 3% this year.

The economy is based on agricultural exports from the rich Nile Valley, and also of Natural Gas, both of which have massive potential for growth. Tourism and construction are both also massive growth sectors, and there is also the potential for a growing services sector in the next few years.

Capital Appreciation

In Hurghada it is hard to find resale properties to get an idea of the immediate growth in value for completed developments, but with such massive growth in the economy and low prices one must expect that growth will be faster than the developed market average 10%. My forecast is that an off plan property in Hurghada bought now will have doubled in value within 5 years.

Rental Yields

The going rate for privately rented holiday property in Hurghada is £385.00 per week. If we take that on a moderate 10 weeks occupancy it gives you a gross rental yield of 25%. That figure will be less taxes, and maintenance costs for the property, as well as any marketing costs.