Egypt’s Red Hot RivieraPosted on: 22 October 2010 by Editor at Large
Year-round sunshine and properties for under £40,000, Egypt’s Red Sea Riviera has the value-for-money buyers diving in, says Laura Henderson.
Thomas Cook was onto a good thing when he spotted the package holiday potential of Egypt back in the 1860s. Today the markers of an ancient civilisation – the Pyramids, the Temple of Abu Simbel, even the needle-like minarets of the Cairo skyline are all living proof of the country’s standing as a treasure trove of Africa. But not everyone comes for the pharaonic floorshow.
‘Diving tourism’ has been a catchphrase for years in the tropical underwater playground of the Red Sea coast. Now, in a bid to boost residential tourism revenues an Egyptian government initiative has seen the area collectively re-branded as the Red Sea Riviera. It’s an encouraging sign for a country still undergoing major political and economic reform.
Now listed by the World Travel and Tourism Council (WTTC) as a “destination to watch”, a cheap Egyptian pound is oiling the tourist wheels, visitor traffic up by over 30 per cent in the past three years, with a forecast of 14m+ holidaymakers in 2011. Property values have made similar gains up 15 per cent per annum in hot spot locations like Cairo and Alexandria.
“The country has historically benefited from inward investment from the Gulf States,” explains George Sorial of Sun Homes Overseas, “but the free float of the Egyptian pound in 2003 and new legislation passed in 2004 allowing non-nationals to own, sell and rent property freely has put the country firmly on the international radar. Ongoing consolidation of the banking sector is also helping to build confidence in the country as a viable long-term investment location.”
To date, the majority of Red Sea revellers have been happy to settle for the camel-and-couscous delights of Sharm el Sheikh on the Sinai’s southern tip. Now, thanks to a revamped international airport at Hurghada several hundred miles up the coast, glitzier resort alternatives are drawing in new money and more of it.
First off the block just 18km south of Hurghada is Sahl Hasheesh: a larger-than-life development comprising 30sqm of green belt land and desertscape topped off with 12.5kms of natural coastline. Managed and developed by Egyptian real estate giant ERC (The Egyptian Resorts Company), the resort’s flagship project is the £1.5bn 250-acre marina community of Serrenia. Visual mock-ups of the futuristic residences with their serpentine roofs and minimalist interiors fall into the ultra-cool category, top-end beachfront villas sporting price tags of £20m, down to spacious 150sqm apartments from £250,000.
Less pricey alternatives with comparable waterfront views include studios from £50,000 in Paradise Gardens, while the hilltop Azzurra complex has spacious two-bedroom apartments with 860 sq ft terraces and gardens for £119,000.
Early-bird investors Nolan Hermans and wife Camilla from the Isle of Wight bought their one-bed apartment in the Palm Beach Plaza complex last August for £58,000.
Says Nolan: “As short-haul destinations go Egypt’s hard to beat on price. We like the fact that the country’s still evolving as a destination. It’s a taste of the exotic without the jet lag.”
A short drive further south, and a smaller-scale desert makeover is nearing completion in the once sleepy fishing port of El Gouna. Billionaire Egyptian developer Samih Sawiris, a man with a passion for boats, acquired the prime waterfront spot in 1990, as the location for his own holiday home. Not content to settle for just a small piece of personal paradise, he has since transformed the site into a vibrant multicultural community of 15,000 - a stepping-stone island chain set around lagoons and Red Sea beaches. Cars are restricted but you can get about on tuk-tuks or hop on a ferry taxi from the marina. A great place to learn to dive – the area has several coral gardens in sheltered waters less than an hour’s boat ride away with a growing array of land-based leisure activities including golf, tennis and horse-riding.
Managed by Orascom Development Holding AG, over 2300 units have been sold to foreign buyers, ranging from Medina-style villas with scooped-out ceilings and mosaic courtyards designed by trendy Egyptian architects Ramy El Dahan and Ahmed Hamdy to curvy and cool-toned in the case of those designed by Michael Graves, the New York based architect behind the 600-acre Ancient Sands Golf Resort.
Likened to the Algarve’s celebrated Vale de Lobo with its tees and greens ambience, the resort is drawing a cosmopolitan crowd, although as MD Jeremy Sturgess points out, well-heeled Egyptian investors are underpinning the market: “Projects like ours fill a niche for amenity-laden lifestyle buys and property here is still undervalued. A two-bed townhouse for £320,000 with excellent payment terms comes in well below equivalent products in Euro-zone destinations like Portugal and France.”
The first developer in El Gouna to offer the option of a five-star managed rental scheme, expected net rental yields of 6 per cent (guaranteed for the first two years), allow for seven weeks personal use each year.
Resident expat Melanie Wright adds: “Resort properties tend to be a safer bet as there’s no uncertainty over guaranteed title, a problem that you may encounter with a private resale and all the ensuing red tape that goes with it. People are slowly starting to spread the word about Egypt: it’s affordable, easy to get to, plus you’ve all that history to soak up. That’s a pretty good start even without the sunshine.”
Buying in Egypt
- Foreign nationals cannot own more than two properties at a time.
- Buying off-plan, developers will typically expect a 10 per cent -30 per cent deposit, with staged payments through with a final 5 per cent-25 per cent payable on completion.
- Closing costs should not exceed 6 per cent. This includes legal fees and property registration fees of between £500 - £1500.
- Community and maintenance charges in resorts are generally modest, starting from £500 per year.
- Foreigners are not subject to any form of taxation. The one exception is tax on rental income, which is levied at a flat rate of 10 per cent.
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