Red Sea Property Has Something For Everyone
Egypt real estate, particularly on the Red Sea Riviera, is famed for being among the least expensive in the world. Note the use of least expensive; in marketing circles it is frowned upon to use the word cheap, but that is not why I have avoided it here. I have avoided it here because Red Sea property is not cheap; it is a bargain because of what you get for your money.
Egypt is one of the fastest growing tourism hot-spots in the world. In an interview with Write About Property earlier this year, the Association for British Travel Agents said that tourism to Egypt from Britain had been growing at around 20% per year for the last few years, and forecast that this would accelerate to 25% this year, as the strong Euro forces people to look outside the Eurozone for cheap holidays.
The Red Sea Riviera encapsulates some of Egypt’s fastest growing tourism hot-spots, most notably Sharm el-Sheikh and Hurghada. In both of those locations you can find the best investments and holiday homes that Red Sea property, and arguably Egypt real estate as a whole has to offer.
The average price for a 2 bedroom luxury apartment on the Red Sea Riviera is under £40,000. The average rent on one of those properties would be about £300 per week. Owners of Red Sea property are currently achieving 15-20 weeks occupancy per year. Doing the calculations from those figures the average rental yield on property on the Red Sea Riviera is 12.5% gross.
It is little wonder then that most Red Sea properties for sale right now are offering very impressive guaranteed rental yields of 8% and upwards.
But Red Sea property comes with another massive benefit.
“Most of the Red Sea Riviera is a National Park, or belongs to some protectorate, both under water and on land. Desert and marine life are protected by a number of laws, and visitors not abiding to the regulations may be subjected to heavy fines.” Source Wikipedia.
Therefore, anyone buying Red Sea property can do so safe in the knowledge that the area will never be over-developed. This also means that demand will continually outstrip supply, which will put massive upward pressure on Red Sea property prices long into the future.
Most people buying Egypt real estate — like most places — at the moment, are doing so on a fly-to-let basis, because the crunch showed everyone that capital values can go down as easily as they can go up. None the less, the potential for capital growth will always be a factor in the decision making process. So adding the protected area reinforcement of the potential for capital growth, to the impressive rental yields mentioned above, Red Sea property offers a pretty powerful investment package.
That is before we even mention the things that the tourists come for: the fantastic climate, great beaches and world renowned marine life that attracts scuba divers from all around the world, which make Red Sea property perfect for lifestyle buyers also. All in all you could say property on the Red Sea Riviera has something for everyone.
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Tags: Egypt, egypt real estate, Hurghada, red sea, sharm el sheikh
July 20th, 2010 at 8:19 am
I personally don’t think that the Red Sea property market will fulfil all the hype currently surrounding it. Unfortunately, there just seems to be too much pessimism in the market at present amongst investors.
Time will tell, but they are certainly stacking up on supply in destinations such as Hughada. As I say, time will tell etc,
July 20th, 2010 at 1:08 pm
Dave,
Having read your comments on the Red Sea property market, I have to say I am confused as to what you are actually baseing your opinion on. If you look at all the supporting data on the markets for property in Sharm el Sheikh, Hurghada and Marsa Alam, they are all positive, and all showing increased deamdn for the past twelve months.
If you also factor in that this years first time visitors to Egypt will also be forming a new demand, then it seems strange to me that you’re not convinced!
Surely the best time to invest is when everyone else is pessimistic and prices are therefore relatively low?
LM
July 21st, 2010 at 10:13 pm
I would agree, as I am not sure where Dave Radcliffe is coming from regarding his thoughts on the Red Sea property market.
In particular, Sharm El Sheikh is likely to prove consistently popular in the future due to the limited opportunity to expand. There are two national parks at the top and bottom of the main town, and the mountains prevent further development inland.
The only place were they can build is in Nabq Bay, and they are building a number of new developments there at the moment.
Mind you, I’ve also heard some good things about a number of property developments in Marsa Alam, and I would be interested to hear from anyone who has already bought property in Marsa Alam. What is the rental market out there like? Is it still too early?
JS
July 26th, 2010 at 5:34 pm
Dave Radcliffe, please let me know where you are getting this prophecy regarding Red Sea property from???
Have you seen the tourist figures for Egypt this year? There is considerable growth throughout Egypt, and it is showing no signs of slowing at present. I bought a property six months ago in Marsa Alam, and already it is in positive equity position, despite the global slowdown.
Egypt is seeing more tourists on a month by month basis than any other tourist destination this year, and it’s year round climate offers the opportunity for genuine rental income growth.
Smalltime.